EXHIBIT 4.1
EXECUTION COPY
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CREDIT AGREEMENT
dated as of May 20, 2003,
among
JAFRA COSMETICS INTERNATIONAL, INC.,
DISTRIBUIDORA COMERCIAL JAFRA, S.A. DE C.V.,
JAFRA WORLDWIDE HOLDINGS (LUX) S.AR.L.,
as Guarantor and Parent of the Borrowers,
THE LENDERS NAMED HEREIN
and
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent
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CREDIT SUISSE FIRST BOSTON
and
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED,
as Lead Arrangers
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED,
as Syndication Agent
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms................................................................... 1
SECTION 1.02. Terms Generally................................................................. 25
SECTION 1.03. Exchange Rates.................................................................. 26
SECTION 1.04. Classification of Loans and Borrowings.......................................... 26
ARTICLE II
The Credits
SECTION 2.01. Commitments...................................................................... 26
SECTION 2.02. Loans............................................................................ 27
SECTION 2.03. Borrowing Procedure.............................................................. 29
SECTION 2.04. Evidence of Debt; Repayment of Loans............................................. 29
SECTION 2.05. Fees............................................................................. 30
SECTION 2.06. Interest on Loans................................................................ 31
SECTION 2.07. Default Interest................................................................. 32
SECTION 2.08. Alternate Rate of Interest....................................................... 32
SECTION 2.09. Termination and Reduction of Commitments......................................... 32
SECTION 2.10. Conversion and Continuation of Borrowings........................................ 33
SECTION 2.11. Repayment of Term Borrowings..................................................... 34
SECTION 2.12. Prepayment....................................................................... 36
SECTION 2.13. Mandatory Prepayments............................................................ 36
SECTION 2.14. Requirements of Law.............................................................. 39
SECTION 2.15. Change in Legality............................................................... 40
SECTION 2.16. Indemnity........................................................................ 41
SECTION 2.17. Pro Rata Treatment............................................................... 42
SECTION 2.18. Sharing of Setoffs............................................................... 42
SECTION 2.19. Payments......................................................................... 43
SECTION 2.20. Taxes............................................................................ 43
SECTION 2.21. Certain Rules Relating to the Payment of Additional Amounts...................... 46
SECTION 2.22. Letters of Credit................................................................ 47
SECTION 2.23. Swingline Loans.................................................................. 51
SECTION 2.24. Consistent Tax Treatment......................................................... 53
ARTICLE III
Representations and Warranties
SECTION 3.01. Financial Condition.............................................................. 53
SECTION 3.02. Change........................................................................... 54
SECTION 3.03. Corporate Existence; Compliance with Law......................................... 54
SECTION 3.04. Corporate Power; Authorization; Enforceable Obligations.......................... 54
SECTION 3.05. No Legal Bar..................................................................... 55
SECTION 3.06. No Material Litigation........................................................... 55
SECTION 3.07. No Default....................................................................... 55
SECTION 3.08. Intellectual Property............................................................ 56
SECTION 3.09. No Burdensome Restrictions; Compliance with Laws................................. 56
SECTION 3.10. Taxes............................................................................ 56
SECTION 3.11. Federal Regulations.............................................................. 56
SECTION 3.12. Employee Benefit Plans........................................................... 56
SECTION 3.13. Investment Company Act; Other Regulations........................................ 57
SECTION 3.14. Subsidiaries..................................................................... 57
SECTION 3.15. Environmental Matters............................................................ 57
SECTION 3.16. Accuracy and Completeness of Information......................................... 58
SECTION 3.17. Solvency......................................................................... 59
SECTION 3.18. Senior Indebtedness.............................................................. 59
SECTION 3.19. Title to Properties; Possession Under Leases..................................... 59
SECTION 3.20. U.S. Security Documents.......................................................... 59
SECTION 3.21. Mexican Security Documents....................................................... 60
SECTION 3.22. Location of Real Property and Leased Premises.................................... 61
SECTION 3.23. Labor Matters.................................................................... 61
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events................................................................ 61
SECTION 4.02. First Credit Event............................................................... 62
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements............................................................. 66
SECTION 5.02. Certificates; Other Information.................................................. 66
SECTION 5.03. Payment of Obligations........................................................... 67
SECTION 5.04. Conduct of Business and Maintenance of Existence................................. 67
SECTION 5.05. Maintenance of Property.......................................................... 67
SECTION 5.06. Insurance........................................................................ 67
SECTION 5.07. Inspection of Property; Books and Records; Discussions........................... 68
SECTION 5.08. Notices.......................................................................... 68
SECTION 5.09. Environmental Laws............................................................... 69
SECTION 5.10. Use of Proceeds.................................................................. 70
SECTION 5.11. Additional Collateral; Further Assurances........................................ 70
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness..................................................................... 72
SECTION 6.02. Liens............................................................................ 75
SECTION 6.03. Investments, Loans and Advances.................................................. 77
SECTION 6.04. Fundamental Changes.............................................................. 78
SECTION 6.05. Sale of Assets................................................................... 79
SECTION 6.06. Restricted Payments.............................................................. 81
SECTION 6.07. Transactions with Affiliates..................................................... 82
SECTION 6.08. Business of Parent, Borrowers and Subsidiaries................................... 83
SECTION 6.09. Negative Pledge Clauses.......................................................... 84
SECTION 6.10. Optional Payments and Modifications of Debt Instruments and
other Material Agreements........................................................ 84
SECTION 6.11. Capital Expenditures............................................................. 85
SECTION 6.12. Consolidated Leverage Ratio...................................................... 86
SECTION 6.13. Consolidated Interest Coverage Ratio............................................. 86
SECTION 6.14. Fiscal Year...................................................................... 86
ARTICLE VII
Events of Default
SECTION 7.01. Certain Bankruptcy Events........................................................ 86
SECTION 7.02. Other Events of Default.......................................................... 87
ARTICLE VIII
The Administrative Agent and the Collateral Agent
SECTION 8.01. Appointment...................................................................... 90
SECTION 8.02. Delegation of Duties............................................................. 90
SECTION 8.03. Exculpatory Provisions........................................................... 90
SECTION 8.04. Reliance by Agents............................................................... 91
SECTION 8.05. Notice of Default................................................................ 91
SECTION 8.06. Acknowledgments and Representations by Lenders................................... 91
SECTION 8.07. Expense Reimbursement; Indemnification........................................... 92
SECTION 8.08. Agents in their Individual Capacities............................................ 92
SECTION 8.09. Successor Agents................................................................. 93
ARTICLE IX
Miscellaneous
SECTION 9.01. Amendments and Waivers........................................................... 93
SECTION 9.02. Notices.......................................................................... 94
SECTION 9.03. No Waiver; Cumulative Remedies................................................... 95
SECTION 9.04. Survival of Representations and Warranties....................................... 95
SECTION 9.05. Successors and Assigns........................................................... 95
SECTION 9.06. Payment of Expenses and Taxes.................................................... 100
SECTION 9.07. Set-off.......................................................................... 101
SECTION 9.08. Interest Rate Limitation......................................................... 101
SECTION 9.09. Counterparts..................................................................... 101
SECTION 9.10. Severability..................................................................... 101
SECTION 9.11. Integration...................................................................... 101
SECTION 9.12. Headings......................................................................... 101
SECTION 9.13. Applicable Law................................................................... 102
SECTION 9.14. Submission to Jurisdiction; Waivers.............................................. 102
SECTION 9.15. Acknowledgments.................................................................. 103
SECTION 9.16. Waivers of Jury Trial............................................................ 103
SECTION 9.17. Confidentiality.................................................................. 103
SECTION 9.18. Judgment Currency................................................................ 104
SECTION 9.19. RESERVED......................................................................... 105
SECTION 9.20. Calculations; Computations....................................................... 105
SECTION 9.21. Security Rights Granted in the Dutch Deeds of Pledge and Covenant to Pay......... 105
SCHEDULES
Schedule 1.01(a) Inactive Subsidiaries
Schedule 1.01(b) Subsidiary Guarantors
Schedule 1.01(c) Mortgaged Properties
Schedule 2.01 Lenders; Commitments
Schedule 3.04(a) Consents, Authorizations, Notices and Filings
Schedule 3.06 Litigation
Schedule 3.08 Intellectual Property
Schedule 3.10 Tax Liens
Schedule 3.14 Subsidiaries
Schedule 3.20 UCC Filings
Schedule 3.22(a) Owned Real Property
Schedule 3.22(b) Leased Real Property
Schedule 4.02(a) Local Counsel
Schedule 4.02(k) Mortgage Filing Offices
Schedule 6.01(a) Indebtedness
Schedule 6.02(a) Liens
Schedule 6.03(a) Investments
Schedule 6.05(f) Specified Subsidiaries
Schedule 6.07(iii) Permitted Indemnification and Contribution
Schedule 6.07(iv) Affiliate Transactions
EXHIBITS
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of DCJ Guarantee Agreement
Exhibit E-1 Form of Indemnity, Subrogation and Contribution Agreement Among
DCJ, JCSA, any DCJ Subsidiary Guarantors, the JCSA Subsidiary
Guarantors and the Collateral Agent
Exhibit E-2 Form of Indemnity, Subrogation and Contribution Agreement among
JCI, any JCI Subsidiary Guarantors and the Collateral Agent
Exhibit F Form of JCI Guarantee Agreement
Exhibit G Form of JCI Subsidiary Guarantee Agreement
Exhibit H Form of Mexican Pledge Agreement
Exhibit I Form of Mexican Subsidiary Guarantee Agreement
Exhibit J Form of Mortgage
Exhibit K Form of Parent Guarantee
Exhibit L Form of Pledge Agreement
Exhibit M Form of U.S. Security Agreement
Exhibit N-1 Form of Term Note
Exhibit N-2 Form of Revolving Note
Exhibit O-1 Form of Opinion of Debevoise & Xxxxxxxx
Exhibit O-2 Form of Opinion of Xxxxx, Xxxxxxx x Xxxxxxx, S.C.
Exhibit O-3 Form of Opinion of Bonn & Xxxxxxx
Exhibit O-4 Form of Opinion of Loyens & Loeff
Exhibit O-5 Form of Opinion of Xxxxxxxx, Xxxxxx & Finger
Exhibit O-6 Form of Local Counsel Opinion
Exhibit P-1 Form of DCJ Special Irrevocable Power of Attorney
Exhibit P-2 Form of JCSA Special Irrevocable Power of Attorney
Exhibit P-3 Form of DCJ Subsidiary Guarantor Special Irrevocable Power of
Attorney
CREDIT AGREEMENT dated as of May 20, 2003,
among JAFRA COSMETICS INTERNATIONAL, INC., a Delaware
corporation ("JCI"), DISTRIBUIDORA COMERCIAL JAFRA,
S.A. DE C.V., a sociedad anonima de capital variable
organized under the laws of Mexico ("DCJ" and, with
JCI, the "Borrowers"), JAFRA WORLDWIDE HOLDINGS (LUX)
S.AR.L., a societe a responsabilite limitee organized
under the laws of Luxembourg ("Parent"), the Lenders
(as defined in Article I), the Issuing Bank (as
defined in Article I), CREDIT SUISSE FIRST BOSTON, a
bank organized under the laws of Switzerland, acting
through its Cayman Islands branch, as administrative
agent (in such capacity, the "Administrative Agent")
and collateral agent (in such capacity, the
"Collateral Agent") for the Lenders.
CDRJ Investments (Lux) S.A. ("Lux S.A."), the indirect owner
of all the Capital Stock of Parent, intends to make a liquidating distribution
to its existing equityholders in an aggregate amount of approximately
$169,000,000 in cash (the "Distribution"). In connection with the Distribution,
Lux S.A. and its Subsidiaries intend to enter into other Transactions (as
defined below).
The Borrowers have requested the Lenders to extend credit in
the form of (a) Term Loans on the Closing Date, in an aggregate principal amount
not in excess of $50,000,000, and (b) Revolving Loans at any time and from time
to time prior to the Maturity Date, in an aggregate principal amount at any time
outstanding not in excess of $40,000,000 (or the Dollar Equivalent thereof in
Alternative Currencies). Parent and the Borrowers have requested the Swingline
Lender to extend credit, at any time and from time to time prior to the Maturity
Date, in the form of Swingline Loans in Dollars, in an aggregate principal
amount at any time outstanding not in excess of $7,500,000. Parent and the
Borrowers have requested the Issuing Bank to issue letters of credit, in an
aggregate face amount at any time outstanding not in excess of $10,000,000, to
support payment obligations incurred in the ordinary course of business by the
Borrowers and their respective Subsidiaries. The proceeds of the Term Loans are
to be used, together with a portion of the proceeds of the New Notes, on the
Closing Date, to refinance the Existing Credit Agreement and the Existing Notes
and to pay a portion of the related fees and expenses. The proceeds of the
Revolving Loans and Swingline Loans are to be used for general corporate
purposes.
The Lenders are willing to extend such credit to the Borrowers
and the Issuing Bank is willing to issue letters of credit for the account of
the Borrowers on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
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"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, bears or bear
interest at a rate determined by reference to the Alternate Base Rate.
"Active Subsidiaries" shall mean all Subsidiaries other than
those listed on Schedule 1.01(a).
"Adjusted LIBOR" shall mean, with respect to any Eurocurrency
Borrowing for any Interest Period, an interest rate per annum equal to the
product of (a) the LIBOR in effect for such Interest Period and (b) Statutory
Reserves.
"Administrative Agent" shall have the meaning assigned to such
term in the preamble to this Agreement.
"Administrative Agent Fees" shall have the meaning assigned to
such term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A, or such other form as may be supplied
from time to time by the Administrative Agent.
"Affiliate" shall mean, as to any Person, any other Person
that, directly or indirectly, is in Control of, is Controlled by or is under
common Control with, such Person.
"Agents" shall have the meaning assigned to such term in
Section 8.01.
"Aggregate Alternative Currency Revolving Credit Exposure"
shall mean the aggregate of the Lenders' Alternative Currency Revolving Credit
Exposures.
"Aggregate Revolving Credit Exposure" shall mean the aggregate
amount of the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective date of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively. The term
"Prime Rate" shall mean the rate of interest per annum determined from time to
time by the Administrative Agent as its prime rate in effect at its principal
office in New York City. The term "Federal Funds Effective Rate" shall mean, for
any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the
3
average of the quotations for the day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Alternative Currency" shall mean (a) Sterling and Euro and
(b) any other freely available currency which is freely transferable and freely
convertible into Dollars and in which dealings in deposits are carried on in the
London interbank market, which shall be requested by either Borrower in respect
of an Alternative Currency Borrowing and approved by the Administrative Agent
and each Lender making an Alternative Currency Loan comprising a part of such
Borrowing.
"Alternative Currency Borrowing" shall mean a Borrowing
comprised of Alternative Currency Loans.
"Alternative Currency Equivalent" shall mean on any date of
determination, with respect to any amount denominated in Dollars in relation to
any specified Alternative Currency, the equivalent in such specified Alternative
Currency of such amount in Dollars, determined by the Administrative Agent
pursuant to Section 1.03 using the applicable Exchange Rate then in effect.
"Alternative Currency Loan" shall mean any Loan denominated in
an Alternative Currency.
"Alternative Currency Revolving Credit Exposure" shall mean,
at any time, the sum of (a) the Dollar Equivalent of the aggregate principal
amount of all outstanding Alternative Currency Loans at such time, (b) the
Dollar Equivalent of the aggregate undrawn amount of all outstanding Letters of
Credit that are denominated in an Alternative Currency at such time and (c) the
Dollar Equivalent of the aggregate principal amount of all L/C Disbursements in
respect of Letters of Credit that are denominated in an Alternative Currency
that have not yet been reimbursed at such time.
"Applicable Percentage" shall mean, for any day, with respect
to any Eurocurrency Loan or ABR Loan, or with respect to the Commitment Fees, as
the case may be, the applicable percentage set forth below under the caption
"Eurocurrency Spread", "ABR Spread" or "Fee Percentage", as the case may be,
based upon the Consolidated Leverage Ratio as of the relevant date of
determination, provided that, until the date of delivery to the Administrative
Agent of Parent's financial statements pursuant to Section 5.01(b) with respect
to its fiscal quarter ended September 30, 2003, the Applicable Percentage shall
be deemed to be in Category 1:
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Eurocurrency ABR Fee
Consolidated Leverage Ratio Spread Spread Percentage
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Category 1
Greater than or equal to 3.25 to 1.00 4.00% 3.00% 0.500%
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Category 2
Less than 3.25 to 1.00 but greater than
or equal to 3.00 to 1.00 3.75% 2.75% 0.500%
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Category 3
Less than 3.00 to 1.00 but greater than
or equal to 2.75 to 1.00 3.50% 2.50% 0.500%
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Category 4
Less than 2.75 to 1.00 3.50% 2.50% 0.375%
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Each change in the Applicable Percentage resulting from a
change in the Consolidated Leverage Ratio shall be effective with respect to all
Loans, Commitments and Letters of Credit outstanding on and after the date of
delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.01(a) or (b) indicating such change until the
date immediately preceding the next date of delivery of such financial
statements and certificates indicating another such change.
Notwithstanding the foregoing, at any time during which Parent
has failed to deliver the financial statements and certificates on or prior to
the date required by Section 5.01(a) or (b), the Consolidated Leverage Ratio
shall be deemed to be in Category 1 for purposes of determining the Applicable
Percentage until the date such financial statements are delivered by Parent.
"Assignee" shall have the meaning assigned to such term in
Section 9.05(c).
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit B or such other form as shall be
approved by the Borrowers and the Administrative Agent.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders on a single date to the same Borrower and, in the case of
Eurocurrency Loans, as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request by either Borrower in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C, or such other form as shall be approved by the Borrowers and the
Administrative Agent.
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which commercial banks in New York City are authorized or
required by law to close; provided, however, that with respect to matters
relating to Eurocurrency Loans, the term "Business Day" shall also exclude any
day on which commercial banks are not open for dealings in Dollar deposits in
the London interbank market, and, when used in connection with determining any
date on which any amount is to be paid or made available in an Alternative
Currency, the term "Business Day" shall also exclude any day on which commercial
banks and foreign exchange markets are not open for business in the principal
financial center in the country of such Alternative Currency.
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"Calculation Date" shall mean (a) the last Business Day of
each calendar month and (b) at any time when the sum of the Aggregate Revolving
Credit Exposure exceeds 75% of the Total Revolving Credit Commitment, the last
Business Day of each calendar week.
"Capital Expenditure" shall have the meaning assigned to such
term in Section 6.11.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents" shall mean (a) securities with maturities
of one year or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b) certificates
of deposit and time deposits, bankers acceptances and overnight bank deposits of
any Lender or of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a term of
not more than 30 days with respect to securities issued or fully guaranteed or
insured by the United States Government or any agency or instrumentality
thereof, (d) commercial paper of a domestic issuer rated at least A-1 or the
equivalent thereof by Standard and Poor's Ratings Service or any successor
rating agency ("S&P") or P-1 or the equivalent thereof by Xxxxx'x Investors
Service, Inc. or any successor rating agency ("Moody's") (or if at such time
neither is issuing ratings, then a comparable rating of such other nationally
recognized rating agency as shall be approved by the Administrative Agent in its
reasonable judgment), (e) securities with maturities of one year or less from
the date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing authority
of any such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's, (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of this
definition, (g) shares of money market mutual or similar funds complying with
the risk limiting conditions of Rule 2a-7 or any successor rule of the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, and (h) investments similar to any of the foregoing denominated in
foreign currencies approved by the board of directors or comparable body of
Parent or either Borrower, in each case provided in clauses (a), (b) and (d)
above, maturing within twelve months after the date of acquisition.
"CD&R" shall mean Xxxxxxx, Dubilier & Rice, Inc., a Delaware
corporation.
"CD&R Group" shall have the meaning assigned to such term in
the definition of the term "Fund V".
"CDRJ North Atlantic (Lux) S.ar.l" shall mean CDRJ North
Atlantic (Lux) S.ar.l, a societe a responsabilite limitee organized under the
laws of Luxembourg.
A "Change in Control" shall be deemed to have occurred if (a)
any Person or "group" (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act
6
of 1934 as in effect on the date hereof), other than any of the Permitted
Investors, shall have acquired a percentage of shares of Voting Stock of Parent
that is (x) greater than the percentage that is held, directly or indirectly, in
the aggregate by the Permitted Investors and (y) greater than 35% of the total
voting power of the Voting Stock of Parent; provided that so long as Parent is a
Subsidiary of an Ultimate Parent, no Person shall be deemed to be or become a
"beneficial owner" of more than 35% of the total voting power of the Voting
Stock of Parent unless such Person (A) shall be or become a "beneficial owner"
of more than 35% of the total voting power of the Voting Stock of such Ultimate
Parent and (B) shall not be a Subsidiary of an Ultimate Parent; (b) Parent shall
cease to beneficially own, directly or indirectly, 100% of the Voting Stock of
either Borrower (other than directors' qualifying shares); or (c) a "Change of
Control" (as defined in the New Note Documents) shall occur.
"Class", when used in respect of any Loan, shall refer to a
Revolving Loan, Term Loan or Swingline Loan, and when used in respect of any
Borrowing, shall refer to a Revolving Credit Borrowing or a Term Borrowing.
"Closing Date" shall mean May 20, 2003.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" shall mean all assets of the Loan Parties, now
owned or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Collateral Release Lenders" shall mean, at any time, Lenders
having Loans (excluding Swingline Loans), L/C Exposure, Swingline Exposure and
unused Revolving Credit and Term Loan Commitments representing 80% of the sum of
all Loans (excluding Swingline Loans) outstanding, L/C Exposure, Swingline
Exposure and unused Revolving Credit and Term Loan Commitments at such time. For
purposes of determining the Collateral Release Lenders, any amounts denominated
in an Alternative Currency shall be translated into Dollars at the Exchange
Rates in effect on the most recent Calculation Date.
"Commitment" shall mean, with respect to any Lender, such
Lender's Revolving Credit Commitment, Term Loan Commitment and Swingline
Commitment.
"Commitment Fee" shall have the meaning assigned to such term
in Section 2.05(a).
"Commonly Controlled Entity" shall mean an entity, whether or
not incorporated, which is under common control with JCI within the meaning of
Section 4001 of ERISA or is part of a group which includes JCI and which is
treated as a single employer under Section 414(b) or 414(c) of the Code.
"Consolidated Current Assets" shall mean, at any date of
determination, all amounts (other than cash and Cash Equivalents) which would,
in conformity with GAAP, be set forth opposite the caption "total current
assets" (or any like caption) on a consolidated balance sheet of Parent and the
Subsidiaries at such date.
"Consolidated Current Liabilities" shall mean, at any date of
determination, all amounts which would, in conformity with GAAP, be set forth
opposite
7
the caption "total current liabilities" (or any like caption) on a consolidated
balance sheet of Parent and the Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of Parent and the Subsidiaries and (b)
without duplication of clause (a) above, all Indebtedness consisting of
Revolving Loans or Swingline Loans to the extent otherwise included therein.
"Consolidated EBITDA" shall mean, for any period, Consolidated
Net Income or Consolidated Net Loss, as the case may be, for such period, (i)
adjusted to exclude the following items (without duplication) to the extent that
such items were included in the calculation of such Consolidated Net Income or
Consolidated Net Loss: (a) depreciation and amortization (including write-offs
or write-downs of amortizable and depreciable items) for such period, (b) the
amount of interest expense (net of interest income) of Parent and the
Subsidiaries, determined on a consolidated basis in accordance with GAAP, for
such period on the aggregate principal amount of their consolidated
Indebtedness, (c) the amount of tax expense of Parent and the Subsidiaries,
determined on a consolidated basis in accordance with GAAP, for such period, (d)
any non-cash expenses and charges, in each case, which represents an accrual for
which no cash is expected to be paid in the short term, (e) any gain or loss
associated with the sale or write-down of assets not in the ordinary course of
business, (f) any non-cash provisions for reserves of discontinued operations,
(g) any extraordinary, unusual or non-recurring gains or losses or charges or
credits, (h) any gains or losses relating to the repatriation of foreign
currency denominated investments, (i) any compensation expense incurred in
connection with dividends, distributions or other payments to holders of Capital
Stock of Parent or an Ultimate Parent (or of warrants, options or rights to
acquire, or deferred shares or other equity-linked interests, relating to any
such Capital Stock), (j) any unrealized gains or losses in respect of Hedging
Agreements, (k) any unrealized foreign currency transaction gains or losses in
respect of Indebtedness of any Person denominated in a currency other than the
functional currency of such Person and (l) any unrealized foreign currency
translation or transaction gains or losses in respect of Indebtedness of Parent
or any Subsidiary owing to Parent or any Subsidiary, and (ii) plus the losses or
minus the gains, as the case may be, through June 30, 2004, from business or
operations conducted by Parent or any of its Subsidiaries in South America or
Thailand (other than any gains or losses related to a business or operation in
South America or Thailand first entered into after the Closing Date).
"Consolidated Interest Coverage Ratio" shall mean, for any
period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period. For purposes of calculating Consolidated
Interest Expense at June 30, 2003, September 30, 2003, December 31, 2003 and
March 30, 2004, respectively, Consolidated Interest Expense shall be deemed to
be the Consolidated Interest Expense from the Closing Date to such date,
multiplied in each case by a fraction, the numerator of which is 365, and the
denominator of which is the number of days from the Closing Date to such date.
"Consolidated Interest Expense" shall mean, for any period,
the amount equal to the interest expense (accrued and paid or payable in cash
for such period, and in any event excluding any amortization or write-off of
financing costs otherwise included therein), net of interest income, of Parent
and the Subsidiaries, determined on a consolidated basis in accordance with
GAAP, for such period on the aggregate principal amount of their consolidated
Indebtedness.
8
"Consolidated Leverage Ratio" shall mean, as of the last day
of any fiscal quarter, the ratio of (a) Total Debt on such date to (b)
Consolidated EBITDA for the period of four consecutive fiscal quarters ended on
such date.
"Consolidated Net Income" or "Consolidated Net Loss" shall
mean, for any period, the amount which, in conformity with GAAP, would be set
forth opposite the caption "net income" (or any like caption) or "net loss" (or
any like caption), as the case may be, on a consolidated statement of earnings
of Parent and the Subsidiaries for such fiscal period.
"Consultants" shall mean shall mean (x) non-employee
independent contractors who sell, purchase or contract to sell or purchase
products of any of Parent and its Subsidiaries and (y) employees of any Mexican
Subsidiary of Parent.
"Contractual Obligation" shall mean, as to any Person, any
provision of any material security issued by such Person or of any material
agreement, instrument or other undertaking to which such Person is a party or by
which it or any of its property (including any Mortgaged Property) is bound.
"Control" shall mean the power, directly or indirectly, to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Event" shall have the meaning assigned to such term in
Section 4.01.
"DCJ Guarantee Agreement" shall mean the Guarantee Agreement,
substantially in the form of Exhibit D, made by DCJ in favor of the Collateral
Agent for the benefit of the Secured Parties.
"DCJ Maximum Percentage" shall mean 60%; provided, however,
that, if the Total Revolving Credit Commitment is required to be reduced in
accordance with Section 2.09(b), then the DCJ Maximum Percentage shall be
reduced so that the maximum amount of the DCJ Revolving Credit Exposure
available after giving effect to such reduction to the Total Revolving Credit
Commitment shall equal the difference between (a) the maximum amount of the DCJ
Revolving Credit Exposure available immediately prior to such reduction and (b)
the amount of such reduction.
"DCJ Revolving Credit Exposure" shall mean, on any date, that
portion of the Aggregate Revolving Credit Exposure on such date attributable to
Loans made to, or Letters of Credit issued for the account of, DCJ.
"DCJ Subsidiary Guarantor" shall mean each Subsidiary of DCJ
listed on Schedule 1.01(b), if any, and each other Subsidiary of DCJ that is or
becomes a party to a Mexican Subsidiary Guarantee Agreement.
"Default" shall mean any of the events specified in Section
7.01 or 7.02, whether or not any requirement for the giving of notice (other
than, in the case of Section 7.02(e), any Default Notice), the lapse of time, or
both, or any other condition, has been satisfied.
9
"Dollars" or "$" shall mean lawful money of the United States
of America.
"Dollar Equivalent" shall mean, on any date of determination,
with respect to any amount denominated in any currency other than Dollars, the
equivalent in Dollars of such amount, determined by the Administrative Agent
pursuant to Section 1.03 using the applicable Exchange Rate with respect to such
currency at the time in effect.
"Domestic Subsidiaries" shall mean, with respect to any
Person, all Subsidiaries of such Person that are incorporated or organized under
the laws of the United States of America, any state thereof or the District of
Columbia.
"Distribution" shall have the meaning assigned to such term in
the preamble to this Agreement.
"Dutch Deeds of Pledge" shall have the meaning assigned to
such term in Section 9.21.
"environment" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata or as otherwise defined in any Environmental Law.
"Environmental Law" shall mean any and all foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority properly
promulgated and having the force and effect of law, or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or human health as
related to the environment, as now or may at any relevant time hereafter be in
effect.
"Environmental Permits" shall have the meaning assigned to
such term in Section 5.09(a).
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"Euro" and "[Euro symbol]" shall mean the lawful single
currency of participating member states of the European Union introduced at the
start of the Third Stage of European Economic and Monetary Union pursuant to the
Treaty establishing the European Community, as amended.
"Eurocurrency", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
bears or bear interest at a rate determined by reference to the Adjusted LIBOR.
"Event of Default" shall mean any of the events specified in
Section 7.01 or 7.02, provided that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been satisfied.
"Excess Cash Flow" shall mean, for any fiscal year of Parent
(or in the case of the fiscal year ending December 31, 2003, the period
commencing on July 1, 2003, and ending on December 31, 2003), the amount equal
to the excess, if any, of (a) the sum of (i) Consolidated EBITDA for such fiscal
year (or period) and (ii) decreases
10
in Working Capital for such fiscal year (or period) minus (b) the sum, without
duplication, of (i) the aggregate amount actually paid by Parent and its
Subsidiaries in cash during such fiscal year on account of (w) Capital
Expenditures, (x) interest expense (accrued and paid or payable in cash) on the
aggregate principal amount of their consolidated Indebtedness, (y) tax expense
and (z) any investments made pursuant to Section 6.03(e), (i), (n) or (p), (ii)
the aggregate amount of all principal payments of Indebtedness (net of any
refinancings of any such Indebtedness to the extent applied to fund such
payments) during such fiscal year (or period) resulting in permanent reductions
of such Indebtedness (excluding, in the case of the Loans, any principal payment
pursuant to Section 2.13(b), (c) or (d), except to the extent that the event
giving rise to such payment causes an increase in Consolidated EBITDA), (iii)
the Net Proceeds from any sale or other disposition of property or assets of
Parent or any of the Subsidiaries to the extent that such Net Proceeds (A)
consist of any Reinvested Amount or are otherwise applied in accordance with
Section 2.13(b) and (B) are included in the calculation of Consolidated EBITDA,
and (iv) increases in Working Capital for such fiscal year (or period).
"Exchange Rate" shall mean, on any day, with respect to any
currency other than Dollars (for purposes of determining the Dollar Equivalent)
or any Alternative Currency (for purposes of determining the Alternative
Currency Equivalent with respect to such Alternative Currency), the rate at
which such currency may be exchanged into Dollars or the applicable Alternative
Currency, as the case may be, as set forth at approximately 11:00 a.m., New York
City time, on such date on the applicable Bloomberg Key Cross Currency Rates
Page. In the event that any such rate does not appear on any Bloomberg Key Cross
Currency Rates Page, the Exchange Rate shall be determined by reference to such
other publicly available service for displaying exchange rates reasonably
selected by the Administrative Agent for such purpose or, at the discretion of
the Administrative Agent, such Exchange Rate shall instead be the arithmetic
average of the spot rates of exchange of the Administrative Agent in the market
where its foreign currency exchange operations in respect of such currency are
then being conducted, at or about 10:00 a.m., local time, on such date for the
purchase of Dollars or the applicable Alternative Currency, as the case may be,
for delivery two Business Days later, provided that, if at the time of any such
determination, for any reason, no such spot rate is being quoted, the
Administrative Agent, with the consent of Parent (not to be unreasonably
withheld), may use any other reasonable method it deems appropriate to determine
such rate, and such determination shall be presumed correct absent manifest
error.
"Exercise" shall mean any exercise by any Management Investor
of any option, warrant or other right to acquire Capital Stock of an Ultimate
Parent from the Parent or any Subsidiary.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of April 30, 1998, as amended, among JCI, JCSA, the lenders from time
to time parties thereto and Credit Suisse First Boston, as administrative agent.
"Existing Note Documents" shall mean the indenture and other
agreements governing the Existing Notes or pursuant to which the Existing Notes
were issued.
"Existing Notes" shall mean the 11 3/4% Senior Subordinated
Notes Due 2008 of JCI and JCSA, in an original aggregate principal amount of
$100,000,000.
11
"Fee Letter" shall mean the Fee Letter dated April 22, 2003,
among the Borrowers and the Lead Arrangers.
"Fees" shall mean the Commitment Fees, the Administrative
Agent's Fees, the L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any Person shall mean the chief
financial officer, principal accounting officer, Treasurer or Controller of such
Person.
"Financing Lease" shall mean any lease of property, real or
personal, the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the lessee.
"Foreign Backstop Letter of Credit" shall mean any Letter of
Credit issued under this Agreement to any Person for the account of either
Borrower to provide credit support for Indebtedness of any Foreign Subsidiary to
such Person which is permitted under Section 6.01.
"Foreign Base Rate" shall mean, in respect of any Alternative
Currency Loan on any day, the rate of interest per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) determined to be the average rate charged to
borrowers of similar quality as the applicable Borrower of such Alternative
Currency Loans as reasonably determined by the Administrative Agent.
"Foreign Base Rate Loan" shall mean any Alternative Currency
Loan bearing interest at a rate determined by reference to a Foreign Base Rate
in accordance with the provisions of Article II. Notwithstanding anything to the
contrary contained herein, Loans may be made or maintained as Foreign Base Rate
Loans only to the extent specified in Section 2.02(f), 2.08 or 2.15.
"Foreign Benefit Plan" shall mean any benefit plan which under
applicable law is required to be funded through a trust or other funding vehicle
other than a trust or funding vehicle maintained exclusively by a Governmental
Authority.
"Foreign Subsidiary" shall mean, with respect to any Person,
any Subsidiary of such Person that is not a Domestic Subsidiary.
"Foreign Subsidiary Holdco" shall mean any Subsidiary of
Parent that owns Capital Stock of either Borrower.
"Former Plan" shall mean any employee benefit plan in respect
of which JCI or a Commonly Controlled Entity has engaged in a transaction
described in Section 4069 or Section 4212(c) of ERISA.
"Fund V" shall mean Xxxxxxx, Dubilier & Rice Fund V Limited
Partnership, a Cayman Islands exempted limited partnership managed by CD&R, and
its successors and assigns who are existing members of the CD&R Group at the
time of any such assignment. For purposes of this definition, "CD&R Group" shall
mean CD&R, any other investment fund or vehicle managed, sponsored or advised by
CD&R, or any Affiliate of or successor to CD&R, Fund V, or any such other
investment fund or vehicle.
"Funded Debt" shall mean, as to any Person, all Indebtedness
of such Person that matures more than one year from the date of its creation or
matures within
12
one year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrowers, Indebtedness in respect of the
Loans.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time.
"Governmental Authority" shall mean the government of the
United States of America, and, as applicable, Mexico, The Netherlands,
Luxembourg, the United Kingdom, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Guarantee" of or by any Person shall mean any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase or lease property, securities
or services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or any other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness; provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business.
"Guarantee Agreements" shall mean the Parent Guarantee
Agreement, the JCI Guarantee Agreement, JCI Subsidiary Guarantee Agreement, the
DCJ Guarantee Agreement, the Mexican Subsidiary Guarantee Agreement and, with
respect to any other guarantee agreement to be entered into pursuant to Section
5.11(b), a guarantee agreement in a form reasonably satisfactory to Parent, the
Borrowers and the Collateral Agent.
"Guarantors" shall mean Parent, JCI, DCJ, JCSA, the JCI
Subsidiary Guarantors, any DCJ Subsidiary Guarantors and the JCSA Subsidiary
Guarantors.
"Hedging Agreement" shall mean any agreement or arrangement
that relates to any interest rate protection, future, option, swap, cap, collar
or hedge, or to any foreign exchange contract or currency swap or hedge, or any
other similar agreement or arrangement and is entered into, purchased or
otherwise acquired by Parent or any of its Subsidiaries in the ordinary course
of business and not for purposes of speculation.
"Holding Company Expenses" means (a) costs (including all
professional fees and expenses) incurred by an Ultimate Parent to comply with
its reporting obligations under applicable laws or under the New Note Documents
or in connection with this Agreement or any other agreement or instrument
relating to Indebtedness of Parent or any Subsidiary, or otherwise incurred in
connection with compliance with
13
applicable laws or applicable rules or regulations of any governmental,
regulatory or self-regulatory body or stock exchange, including any reports
filed with respect to the Securities Act of 1933, as amended, the Exchange Act
of 1934, as amended, or the respective rules and regulations promulgated
thereunder, (b) indemnification obligations of an Ultimate Parent owing to
directors, officers, employees or other Persons under its charter or by-laws or
pursuant to written agreements with any such Person, (c) obligations of an
Ultimate Parent in respect of director and officer insurance (including premiums
therefor), (d) other operational expenses of an Ultimate Parent incurred in the
ordinary course of business, and (e) expenses incurred by an Ultimate Parent in
connection with any public offering of Capital Stock or Indebtedness (i) where
the net proceeds of such offering are intended to be received by or contributed
or loaned to Parent or a Subsidiary, or (ii) in a prorated amount of such
expenses in proportion to the amount of such net proceeds intended to be so
received, contributed or loaned, or (iii) otherwise on an interim basis prior to
completion of such offering so long as an Ultimate Parent shall cause the amount
of such expenses to be repaid to Parent or the relevant Subsidiary out of the
proceeds of such offering promptly if completed.
"Indebtedness" of any Person shall mean, without duplication,
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), (b) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (c) all obligations
of such Person under Financing Leases, (d) all reimbursement obligations
(contingent or otherwise) of such Person in respect of letters of credit issued
for the account of such Person, (e) all obligations of such Person in respect of
acceptances created for the account of such Person, (f) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any preferred stock (or equivalent equity interests) of such
Person which is mandatorily redeemable prior to the scheduled maturity of the
Term Loans (other than any such stock held by Management Investors), (g) all
Guarantees by such Person of Indebtedness of others and (h) all obligations of
the types referred to in clauses (a) through (g) above secured by any Liens on
any property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.
"Indemnity, Subrogation and Contribution Agreements" shall
mean the Indemnity, Subrogation and Contribution Agreement, substantially in the
form of Exhibit E-1, among DCJ, JCSA, any DCJ Subsidiary Guarantors, the JCSA
Subsidiary Guarantors and the Collateral Agent and the Indemnity, Subrogation
and Contribution Agreement, substantially in the form of Exhibit E-2, among JCI,
any JCI Subsidiary Guarantors and the Collateral Agent.
"Insolvency" shall mean, with respect to any Multiemployer
Plan, the condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Intellectual Property" shall have the meaning assigned to
such term in Section 3.08.
"Interest Payment Date" shall mean (a) with respect to any ABR
Loan (including any Swingline Loan), or any Foreign Base Rate Loan, the last
Business Day of each March, June, September and December and the Maturity Date,
and (b) with respect to any Eurocurrency Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurocurrency Borrowing with an Interest Period of more than three months'
duration, each day that would have been an
14
Interest Payment Date had successive Interest Periods of three months' duration
been applicable to such Borrowing, and, in addition, the date of any prepayment
of an Alternative Currency Borrowing or a Eurocurrency Borrowing or conversion
of a Eurocurrency Borrowing to an ABR Borrowing.
"Interest Period" shall mean, as to any Eurocurrency
Borrowing, the period commencing on the date of such Borrowing (or, as
applicable, the conversion or continuation of such Borrowing) and ending on the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter,
as the applicable Borrower may elect; provided, however, that, if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day. Interest shall accrue from
and including the first day of an Interest Period to but excluding the last day
of such Interest Period.
"Investment" shall have the meaning assigned to such term in
Section 6.03.
"Issuing Bank" shall mean, as the context may require, (a)
Credit Suisse First Boston, with respect to Letters of Credit issued by it, and
(b) any other Lender that may become an Issuing Bank under Section 2.22(i) or
(k), with respect to Letters of Credit issued by it.
"Issuing Bank Fees" shall have the meaning assigned to such
term in Section 2.05(c).
"JCI Guarantee Agreement" shall mean the Guarantee Agreement,
substantially in the form of Exhibit F, made by JCI in favor of the Collateral
Agent for the benefit of the Secured Parties.
"JCI Subsidiary Guarantee Agreement" shall mean the Subsidiary
Guarantee Agreement, substantially in the form of Exhibit G, made by the JCI
Subsidiary Guarantors in favor of the Collateral Agent for the benefit of the
Secured Parties.
"JCI Subsidiary Guarantor" shall mean each Domestic Subsidiary
of JCI listed on Schedule 1.01(b), if any, and each other Domestic Subsidiary of
JCI that is or becomes a party to a JCI Subsidiary Guarantee Agreement.
"JCSA" shall mean Jafra Cosmetics International, S.A. de C.V.,
a sociedad anonima de capital variable organized under the laws of Mexico.
"JCSA Subsidiary Guarantor" shall mean each Subsidiary of JCSA
listed on Schedule 1.01(b), and each other Subsidiary of JCSA that is or becomes
a party to a Mexican Subsidiary Guarantee Agreement.
"L/C Commitment" shall mean the commitment of the Issuing Bank
to issue Letters of Credit pursuant to Section 2.22.
"L/C Disbursement" shall mean a payment or disbursement made
by the Issuing Bank pursuant to a Letter of Credit.
15
"L/C Exposure" shall mean at any time the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit denominated in Dollars, (b) the Dollar Equivalent of the aggregate then
undrawn and unexpired amount of outstanding Letters of Credit denominated in
Alternative Currencies, (c) the aggregate principal amount of all L/C
Disbursements in respect of Letters of Credit denominated in Dollars that have
not then been reimbursed or converted to Loans and (d) the Dollar Equivalent of
the aggregate principal amount of all L/C Disbursements in respect of Letters of
Credit denominated in Alternative Currencies that have not then been reimbursed
or converted to Loans. The L/C Exposure of any Revolving Credit Lender at any
time shall mean its Pro Rata Percentage of the aggregate L/C Exposure at such
time.
"L/C Participation Fee" shall have the meaning assigned to
such term in Section 2.05(c).
"Lead Arrangers" shall mean Credit Suisse First Boston and
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and their respective
successors and assigns.
"Lenders" shall mean (a) the financial institutions listed on
Schedule 2.01 (other than any such financial institution that has ceased to be a
party hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that is a party hereto pursuant to an Assignment and Acceptance and
in compliance with Section 9.05. Unless the context indicates otherwise, the
term "Lenders" shall include the Swingline Lender.
"Letter of Credit" shall mean any letter of credit issued
pursuant to Section 2.22.
"LIBOR" shall mean, with respect to any Eurocurrency
Borrowing, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date which is two Business Days
prior to the beginning of the relevant Interest Period (as specified in the
applicable Borrowing Request) by reference to the British Bankers' Association
Interest Settlement Rates for deposits in Dollars or the relevant Alternative
Currency, as applicable (as set forth by any service selected by the
Administrative Agent which has been nominated by the British Bankers'
Association as an authorized information vendor for the purpose of displaying
such rates), for a period equal to the Interest Period applicable to such
Eurocurrency Borrowing, provided that, to the extent that an interest rate is
not ascertainable pursuant to the foregoing provisions of this definition, the
"LIBOR" shall be the interest rate per annum determined by the Administrative
Agent to be the average of the rates per annum at which deposits in Dollars or
the relevant Alternative Currency, as applicable, are offered for such relevant
Interest Period to major banks in the London interbank market in London, England
by the Administrative Agent at approximately 11:00 a.m. (London time) on the
date which is two Business Days prior to the beginning of such Interest Period.
"Lien" shall mean any mortgage, pledge, hypothecation,
encumbrance, lien (statutory or other), charge or security interest or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any Financing Lease having substantially the same
economic effect as any of the foregoing).
"Loan Documents" shall mean this Agreement, the Notes, the
Guarantee Agreements, the Security Documents and the Indemnity, Subrogation and
Contribution Agreements.
16
"Loan Parties" shall mean the Borrowers, the Guarantors and
the Subsidiaries of Parent that are parties to the Pledge Agreement, the Mexican
Pledge Agreement, the U.S. Security Agreement and the Mexican Security
Agreement.
"Loans" shall mean the Revolving Loans, the Term Loans and the
Swingline Loans.
"Management Investors" shall mean the officers, directors,
employees and other members of the management of an Ultimate Parent, Parent or
any of its Subsidiaries, or immediate family members or relatives thereof, or
trusts or partnerships for the benefit of any of the foregoing, or any of their
heirs, executors, successors or legal representatives, who at any particular
date shall beneficially own or have the right to acquire, directly or
indirectly, common stock of Parent or an Ultimate Parent.
"Management Subscription Agreements" shall mean one or more
stock subscription, stock option, grant or other agreements which have been or
may be entered into between an Ultimate Parent, Parent or any of its
Subsidiaries and certain Management Investors, with respect to the issuance to
or ownership by such parties of common stock of an Ultimate Parent, Parent or
any of its Subsidiaries or options, warrants, units or other rights in respect
of common stock of an Ultimate Parent, Parent or any of its Subsidiaries, any
agreements entered into from time to time by transferees of any such stock,
options, warrants or other rights in connection with the sale, transfer or
reissuance thereof, and any assumptions of any of the foregoing by third
parties, as amended, supplemented, waived or otherwise modified from time to
time.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, results of operations, property or condition (financial or
otherwise) of Parent and the Subsidiaries (after giving effect to the
Transactions), taken as a whole, or (b) the validity or enforceability of the
Loan Documents as to any Loan Parties party thereto or the rights and remedies
of the Administrative Agent, the Collateral Agent or the Lenders hereunder and
thereunder, taken as a whole.
"Material Environmental Amount" shall mean an amount payable
by Parent, either Borrower or any of the Subsidiaries in respect of or under any
Environmental Law for remedial costs, compliance costs, compensatory damages,
punitive damages, fines, penalties or any combination thereof in an amount that
would reasonably be expected to have a Material Adverse Effect.
"Material of Environmental Concern" shall mean any hazardous
or toxic substances, materials, pollutants or wastes, defined or regulated as
such in or under any applicable Environmental Law, including gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Material Indebtedness" shall mean Indebtedness in an
aggregate outstanding principal amount of $5,000,000 (or the Dollar Equivalent
thereof in another currency) or more.
"Material Subsidiary" shall mean, at any date, (a) any
Subsidiary of Parent which at such date has a market value in excess of
$2,500,000 or annual revenues in excess of $2,500,000 or (b) any group of
Subsidiaries of Parent, taken as a whole, which at such date has an aggregate
market value in excess of $5,000,000 or annual revenues in excess of $5,000,000.
17
"Maturity Date" shall mean May 20, 2008.
"Mexican Pledge Agreement" shall mean the Mexican Pledge
Agreement, substantially in the form of Exhibit H, among CDRJ Latin America
Holding Company B.V., Latin Cosmetics Holdings B.V., Regional Cosmetics Holding
B.V., Southern Cosmetics Holdings B.V. and CDRJ Mexico Holding Company B.V., as
pledgors, and the Collateral Agent, as pledgee and for the benefit of the
Secured Parties.
"Mexican Financing Agreement" shall mean one or more financing
agreements or other arrangements whereby DCJ and/or its Subsidiaries may incur
Indebtedness of the type contemplated by Section 6.01(k).
"Mexican Security Agreement" shall mean the irrevocable
transfer of title and guaranty trust agreement (contrato de fideicomiso
irrevocable traslativo de dominio y de garantia) among JCSA, DCJ and the
Subsidiaries of JCSA and DCJ, if any, party thereto, collectively as trustors,
the Collateral Agent, as beneficiary in first place (for the benefit of the
Secured Parties) and the Trustee, acting in such capacity.
"Mexican Security Documents" shall mean each Security Document
governed by the laws of Mexico, executed by DCJ, JCSA or any of their respective
Mexican Subsidiaries and CDRJ Latin America Holding Company B.V. and its four
direct Dutch Subsidiaries.
"Mexican Subsidiary" shall mean, with respect to any Person,
any Subsidiary of such Person that is incorporated or organized under the laws
of Mexico or any political division thereof.
"Mexican Subsidiary Guarantee Agreement" shall mean the
Guarantee Agreement, substantially in the form of Exhibit I, made by JCSA, the
JCSA Subsidiary Guarantors and any DCJ Subsidiary Guarantors in favor of the
Collateral Agent for the benefit of the Secured Parties.
"Mexico" shall mean the United Mexican States.
"Mortgaged Properties" shall mean the owned real properties
and leasehold and subleasehold interests of the Loan Parties specified on
Schedule 1.01(c).
"Mortgages" shall mean the mortgages, deeds of trust,
leasehold mortgages, assignments of leases and rents, modifications and other
security documents delivered pursuant to Section 4.02(k)(i) or pursuant to
Section 5.11, each substantially in the form of Exhibit J.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds" shall mean, with respect to any of the events
referred to in Section 2.13(b) or (d) and the defined terms used therein, (a)
the gross cash consideration, and all cash proceeds (as and when received) of
non-cash consideration (including any such cash proceeds in the nature of
principal and interest payments on account of promissory notes or similar
obligations), received by Parent and the Subsidiaries in connection with such
event, minus (b) the sum, without duplication, of (i) any taxes reasonably
estimated to be payable to any Federal, state, local or foreign taxing authority
by Parent and the Subsidiaries as a result thereof or as a result of any
18
transfer of funds in connection with the application of such funds in accordance
with Section 2.13(b) or (d), (ii) the amount of fees and commissions (including
reasonable investment banking fees, legal, accounting, consulting, survey, title
and recording tax expenses and other costs and expenses actually incurred in
connection with such event which are paid or payable by Parent and the
Subsidiaries), (iii) the amount of such net cash proceeds which are attributable
to (and payable to) minority interests, (iv) the amount of any reserve
reasonably maintained by Parent and the Subsidiaries with respect to
indemnification obligations owing pursuant to the definitive documentation
pursuant to which such event is consummated (with any unused portion of such
reserve to constitute Net Proceeds on the date upon which the indemnification
obligations terminate), (v) the amount of Indebtedness (other than intercompany
Indebtedness), if any, which is required to be repaid at the time or as a result
of such event out of the proceeds thereof and (vi) with respect to the
determination of Net Proceeds from a sale or other disposition of property or
assets referred to in Section 2.13(b), appropriate amounts to be provided by
Parent and the Subsidiaries to be applied to satisfy any reasonable expenses and
liabilities associated with any such property or assets and retained by Parent
or any such Subsidiary after such sale or other disposition and other
appropriate amounts which shall be used by Parent or any of the Subsidiaries to
discharge or pay on a current basis any other liabilities associated with such
property or assets.
"New Note Documents" shall mean the indenture and other
agreements governing the New Notes or pursuant to which the New Notes are
issued.
"New Notes" shall mean the 10 3/4% Senior Subordinated Notes
Due 2011 of the Borrowers, in an original aggregate principal amount of
$200,000,000.
"Note" shall have the meaning assigned to such term in Section
2.04(e).
"Obligations" shall mean all obligations defined as
"Obligations" in the Guarantee Agreements and the Security Documents.
"Parent Guarantee Agreement" shall mean the Parent Guarantee
Agreement, substantially in the form of Exhibit K, made by Parent in favor of
the Collateral Agent for the benefit of the Secured Parties.
"Participants" shall have the meaning assigned to such term in
Section 9.05(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 2 to the U.S. Security Agreement.
"Permitted Investors" shall mean (a) the CD&R Group, (b) any
Person reasonably satisfactory to the Lead Arrangers, (c) any Management
Investor and (d) any Person acting in the capacity of an underwriter in
connection with a public or private offering of Capital Stock of Parent.
"Permitted Ultimate Parent Payments" means loans, advances,
dividends or distributions to an Ultimate Parent or other payments by Parent or
any Subsidiary (including through the purchase or other acquisition of Capital
Stock of an Ultimate
19
Parent) to pay or permit such Ultimate Parent to pay any Holding Company
Expenses or any Related Taxes.
"Person" shall mean any individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan" shall mean any employee pension benefit plan which is
covered by ERISA and in respect of which JCI or a Commonly Controlled Entity is
an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement,
substantially in the form of Exhibit L, among Parent, JCI, the Subsidiaries
party thereto and the Collateral Agent for the benefit of the Secured Parties.
"Preferred Stock" as applied to the Capital Stock of any
corporation, shall mean Capital Stock of any class or classes (however
designated) that by its terms is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other class
of such corporation.
"Prepayment Account" shall have the meaning assigned to such
term in Section 2.13(g).
"Pro Rata Percentage" of any Revolving Credit Lender at any
time shall mean the percentage of the Total Revolving Credit Commitment
represented by such Lender's Revolving Credit Commitment.
"Process Agent" shall have the meaning assigned to such term
in Section 9.14(b).
"Register" shall have the meaning given such term in Section
9.05(e).
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Reinvested Amount" shall mean, with respect to any sale,
transfer or other disposition of assets of Parent or any of its Subsidiaries
permitted by Section 6.05(i) or any recovery of amounts under any property
insurance policies of Parent or any of its Subsidiaries, that portion of the Net
Proceeds thereof as shall, according to a certificate of a Responsible Officer
of Parent or the applicable Borrower delivered to the Administrative Agent
within 30 days of such sale or other disposition, be reinvested in the business
of Parent or such Borrower and its Subsidiaries in a manner consistent with the
requirements of Section 6.08 and the other provisions hereof within 360 days of
the receipt of such Net Proceeds or, if such reinvestment is in a project
authorized by the board of directors or comparable body of Parent or the
applicable Borrower that will take longer than such 360 days to complete, the
period of time necessary to complete such project (so long as Parent or such
Subsidiary has committed to expend such portion of the Net Proceeds within, and
is diligently pursuing such project during, the period of 360 days from the
receipt of such Net Proceeds), provided that (i) if any such certificate of a
20
Responsible Officer is not delivered to the Administrative Agent on the date of
such sale, transfer or other disposition, any Net Proceeds therefrom shall be
promptly (x) deposited in a cash collateral account established with the
Collateral Agent to be held as collateral for the benefit of the Secured Parties
on terms reasonably satisfactory to the Administrative Agent and shall remain on
deposit in such cash collateral account until such certificate of a Responsible
Officer is (or is required to be) delivered to the Administrative Agent or (y)
to the extent that the applicable Borrower has indicated that no such
certificate will be delivered, used to make a prepayment of the Revolving Loans
in accordance with Section 2.12, provided that, notwithstanding anything in this
Agreement to the contrary, the Borrowers may not request any Revolving Credit
Borrowing that would reduce the aggregate amount of the unused Revolving Credit
Commitments to an amount that is less than the amount of any such prepayment
until such certificate of a Responsible Officer is delivered to the
Administrative Agent, and (ii) any Net Proceeds not so reinvested by such 360th
day or later, as applicable, shall be utilized on such day to prepay Term Loans
pursuant to Section 2.13(b).
"Related Taxes" shall mean (a) any taxes, charges or
assessments, including income, sales, use, transfer, rental, ad valorem,
value-added, stamp, property, consumption, franchise, license, capital, net
worth, gross receipts, excise, occupancy, intangibles or similar taxes, charges
or assessments (other than U.S. federal, state or local taxes measured by income
and U.S. federal, state or local withholding imposed on payments made by an
Ultimate Parent), required to be paid by such Ultimate Parent by virtue of its
being incorporated or having Capital Stock outstanding (but not by virtue of
owning stock or other equity interests of any corporation or other entity other
than Parent or any of its Subsidiaries), or being a holding company parent of
Parent or having received Capital Stock of Parent or other assets as a capital
contribution, or receiving dividends from or other distributions in respect of
the Capital Stock of Parent, or having guaranteed any obligations of Parent or
any Subsidiary thereof, or having made any payment in respect of any of the
items for which Parent is permitted to make payments to such Ultimate Parent
pursuant to Section 6.06, or (b) any other U.S. taxes measured by income for
which such Ultimate Parent is liable up to an amount not to exceed with respect
to U.S. federal taxes the amount of any such taxes that Parent would have been
required to pay on a separate company basis or on a consolidated basis if Parent
had filed a consolidated return on behalf of an affiliated group (as defined in
Section 1504 of the Code) of which it were the common parent, or with respect to
U.S. state and local taxes, the amount of such taxes that Parent would have been
required to pay on a separate company basis or on a combined basis if Parent had
filed a combined return on behalf of an affiliated group consisting only of
Parent and its Subsidiaries.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Material of
Environmental Concern in, into, onto or through the environment.
"Reorganization" shall mean, with respect to any Multiemployer
Plan, the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Repayment Date" shall have the meaning given such term in
Section 2.11(a).
21
"Reportable Event" shall mean any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the thirty-day
notice period is waived under subsections .22, .23, .25, .27, .28 or .29 of PBGC
Reg Section 4043.
"Required Lenders" shall mean, at any time, at least two
Lenders having Loans (excluding Swingline Loans), L/C Exposure, Swingline
Exposure and unused Revolving Credit and Term Loan Commitments representing an
aggregate of more than 50% of the sum of all Loans (excluding Swingline Loans)
outstanding, L/C Exposure, Swingline Exposure and unused Revolving Credit and
Term Loan Commitments at such time. For purposes of determining the Required
Lenders, any amounts denominated in an Alternative Currency shall be translated
into Dollars at the Exchange Rates in effect on the most recent Calculation
Date.
"Requirement of Law" shall mean, as to any Person, the
certificate or articles of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation or
any restrictions of record affecting any Mortgaged Property or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject, provided that the foregoing shall
not apply to any non-binding recommendation of any Governmental Authority.
"Reset Date" shall have the meaning assigned to such term in
Section 1.03(a).
"Responsible Officer" of any Person shall mean the chief
executive officer, the president or vice president, or, with respect to
financial matters, the Financial Officer of such Person or, with respect to
benefits matters, the appropriate officer of such Person.
"Revolving Credit Borrowing" shall mean a Borrowing comprised
of Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Revolving Loans and/or participate
in Swingline Loans hereunder as set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender assumed its Revolving Credit
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.05.
"Revolving Credit Exposure" shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Loans of such Lender denominated in Dollars, plus the
Dollar Equivalent of the aggregate principal amount at such time of all
outstanding Revolving Loans of such Lender that are Alternative Currency Loans,
plus the aggregate amount at such time of such Lender's L/C Exposure and
Swingline Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving
Credit Commitment.
"Revolving Loans" shall mean the revolving loans made by the
Lenders to the Borrowers pursuant to Section 2.01.
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"Secured Parties" shall, as applicable, (i) with respect to
the U.S. Security Documents, have the meaning assigned to such term in the U.S.
Security Agreement; (ii) with respect to the Mexican Pledge Agreement, have the
meaning assigned to the term "Lenders" in the Mexican Pledge Agreement, and
(iii) with respect to the Mexican Security Agreement, have the meaning assigned
to the term "acreditantes" in the Mexican Security Agreement.
"Security Documents" shall mean the Mortgages, the U.S.
Security Agreement, the Mexican Security Agreement, the Mexican Pledge
Agreement, the Pledge Agreement and each of the security agreements, mortgages
and other instruments and documents executed and delivered pursuant to any of
the foregoing or pursuant to Section 5.11.
"Single Employer Plan" shall mean any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" shall mean, when used with respect to any Person,
that, as of any date of determination, (a) the amount of the assets of such
Person, at a fair valuation, will, as of such date, exceed the amount of all
liabilities of such Person, contingent or otherwise, as of such date, (b) the
present fair saleable value of the assets of such Person will, as of such date,
be greater than the amount that will be required to pay the probable liability
of such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business and (d) such Person will be able to pay its
debts as they mature. For purposes of determining whether a Person is Solvent,
the amount of any contingent liability shall be computed as the amount that, in
light of all the facts and circumstances existing at such time, represents the
amount that may reasonably be expected to become an actual or matured liability.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board or by any other Governmental Authority to
which Lenders are subject for any category of deposits or liabilities
customarily used to fund loans or by reference to which interest rates
applicable to Loans are determined. Such reserve, liquid asset or similar
percentages shall include those imposed pursuant to Regulation D of the Board
(and for purposes of Regulation D, Eurocurrency Loans denominated in Dollars
shall be deemed to constitute Eurocurrency Liabilities). Eurocurrency Loans
shall be deemed to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under Regulation D or any other applicable law, rule or
regulation. Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Sterling" and "[pound sterling symbol]" shall mean the lawful
currency for the time being of the United Kingdom.
"Subsidiary" shall mean, as to any Person, a corporation,
partnership or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or
23
other managers of such corporation, partnership or other entity are at the time
owned, controlled or held, or the management of which is otherwise Controlled,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
Parent.
"Subsidiary Guarantors" shall mean the JCI Subsidiary
Guarantors, any DCJ Subsidiary Guarantors and the JCSA Subsidiary Guarantors.
"Swingline Commitment" shall mean the commitment of the
Swingline Lender to make Swingline Loans pursuant to Section 2.23 in the amount
referred to therein.
"Swingline Exposure" shall mean at any time the aggregate
principal amount at such time of all outstanding Swingline Loans. The Swingline
Exposure of any Revolving Credit Lender at any time shall equal its Pro Rata
Percentage of the aggregate Swingline Exposure at such time.
"Swingline Lender" shall mean Credit Suisse First Boston.
"Swingline Loan" shall mean any loan made by the Swingline
Lender pursuant to its Swingline Commitment.
"Term Borrowing" shall mean a Borrowing comprised of Term
Loans.
"Term Loan Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Term Loans hereunder as set forth
on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender assumed its Term Loan Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.05.
"Term Loans" shall mean the term loans made by the Lenders to
the Borrowers pursuant to Section 2.01. Each Term Loan shall be a Eurocurrency
Term Loan or an ABR Term Loan.
"Total Debt" shall mean, as of any date of determination,
without duplication, the total Indebtedness of Parent and its Subsidiaries
required to be reflected on a consolidated balance sheet of Parent on such date
in accordance with GAAP (other than Indebtedness of the type referred to in
clause (d), (e) or (g) of the definition of the term "Indebtedness", except, in
the case of such clause (d) or (e), to the extent of any unreimbursed drawings
thereunder).
"Total Revolving Credit Commitment" shall mean, at any time,
the aggregate amount of the Revolving Credit Commitments, as in effect at such
time.
"Transaction Documents" shall mean this Agreement and the
other Loan Documents, the New Note Documents, the New Notes and any purchase or
registration rights agreements or offering circular relating to the New Notes.
"Transactions" shall mean, collectively, any or all of the
following:
(i) the formation of DCJ as a Subsidiary of CDRJ Latin America
Holding Company B.V., and the recapitalization of the Capital Stock of
JCSA;
24
(ii) the entry into the New Note Documents, the offer and
issuance of the New Notes, and the provision of Guarantees of the New
Notes by the guarantors of the New Notes pursuant to the New Note
Documents;
(iii) the entry into this Agreement and the incurrence of
Indebtedness hereunder;
(iv) the acquisition by DCJ of Preferred Stock of JCSA from
JCSA and from one or more of CDRJ Latin America Holding Company B.V.
and its Subsidiaries; and the acquisition by DCJ of certain assets and
liabilities of a Subsidiary of JCSA related to its distribution
business;
(v) the satisfaction and discharge of the indenture for the
Existing Notes, including the deposit of funds with the trustee under
such indenture in connection therewith, and/or the redemption or other
acquisition or retirement of such Existing Notes;
(vi) the repayment of amounts outstanding under the Existing
Credit Agreement, the termination of commitments thereunder, and the
collateralization of letters of credit remaining outstanding (if any);
(vii) the distribution of up to approximately $158.6 million
to CDRJ North Atlantic (Lux) S.ar.l. by one or more of its
Subsidiaries, and the distribution by CDRJ North Atlantic (Lux) S.ar.l.
of up to approximately $158.6 million to Lux S.A.;
(viii) the transfer by CDRJ North Atlantic (Lux) S.ar.l. of
its assets and liabilities to Parent, including the Capital Stock of
JCI and CDRJ Latin American Holding Company B.V.;
(ix) the entry into an agreement appointing Parent as the
liquidator of Lux S.A., including with respect to making the
liquidating distributions of Lux S.A. described in clause (x) below and
the performance by Parent of its duties as liquidator under Luxembourg
law and its obligations under such agreement;
(x) the making of (A) a liquidating distribution by Lux S.A.
to the holders of its Capital Stock (or equivalent equity interests) of
(x) up to approximately $158.6 million and (B) all of its other assets,
including the outstanding capital stock (or equivalent equity
interests) of CDRJ North Atlantic (Lux) S.ar.l.; and (ii) certain
compensating payments to holders of options to acquire Capital Stock of
Lux S.A. (or CDRJ North Atlantic (Lux) S.ar.l.), in connection with
such liquidating distribution; and
(xi) all other transactions relating to any of the foregoing
(including but not limited to payment of fees and expenses related to
any of the foregoing).
"Transferee" shall have the meaning assigned to such term in
Section 9.05(g).
"Trustee" shall mean BankBoston, S.A., Institucion de Banca
Multiple, Division Fiduciaria, acting in its capacity as trustee under the
Mexican Security Agreement.
25
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined and the currency in which such Loan or
the Loans comprising such Borrowing are denominated. For purposes hereof, the
term "Rate" shall include the Adjusted LIBOR and the Alternate Base Rate, and
currency shall include Dollars and any Alternative Currency permitted hereunder.
"Ultimate Parent" means any Person of which the Parent at any
time is or becomes a wholly owned Subsidiary after the Closing Date.
"Underfunding" shall mean an excess of all accrued benefits
under a Plan (based on those assumptions used to fund such Plan), determined as
of the most recent annual valuation date, over the value of the assets of such
Plan allocable to such accrued benefits.
"U.S. Security Agreement" shall mean the Security Agreement,
substantially in the form of Exhibit M, among JCI, the Subsidiaries party
thereto and the Collateral Agent for the benefit of the Secured Parties.
"U.S. Security Documents" shall mean each Security Document
executed by Parent, JCI or a Domestic Subsidiary.
"Voting Stock" of any Person shall mean all Capital Stock
entitled to vote generally in the election of directors (or Persons performing
similar functions) of such Person.
"wholly owned", shall mean, when used to modify the term
"Subsidiary", a Subsidiary of a Person of which securities (except for
directors' qualifying shares or shares held by nominees) or other ownership
interests representing 100% of the equity or 100% of the ordinary voting power
or 100% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held by such Person or one or more wholly
owned Subsidiaries of such Person or by such Person and one or more wholly owned
Subsidiaries of such Person.
"Working Capital" shall mean, as of any date of determination,
Consolidated Current Assets on such date minus Consolidated Current Liabilities
on such date.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, (a) any reference in
this Agreement (or incorporated in any other Loan Document by reference to this
Agreement) to any Loan Document shall mean such Loan Document as amended,
restated, supplemented or otherwise modified from time to time and (b) all terms
of an accounting or financial nature shall be construed in accordance with GAAP,
as in effect from time to time; provided, however, that if Parent notifies the
Administrative Agent that Parent wishes to amend any covenant in Article VI or
any related definition to eliminate the effect of any change in GAAP occurring
after the date of this Agreement on the operation of such covenant (or if the
Administrative Agent notifies Parent that the Required Lenders wish to amend
Article VI or any related
26
definition for such purpose), then Parent's compliance with such covenant shall
be determined on the basis of GAAP in effect immediately before the relevant
change in GAAP became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to Parent and the Required Lenders.
SECTION 1.03. Exchange Rates. (a) Not later than 1:00 p.m.,
New York City time, on each Calculation Date, the Administrative Agent shall
determine the Exchange Rate as of such Calculation Date to be used for
calculating relevant Dollar Equivalent and Alternative Currency Equivalent
amounts. The Exchange Rates so determined shall become effective on the first
Business Day immediately following the relevant Calculation Date (a "Reset
Date"), shall remain effective until the next succeeding Reset Date and shall
for all purposes of this Agreement (other than any provision expressly requiring
the use of a current Exchange Rate) be the Exchange Rates employed in converting
any amounts between the applicable currencies.
(b) Not later than 5:00 p.m., New York City time, on each
Reset Date and on the date of each Alternative Currency Borrowing, the
Administrative Agent shall (i) determine the Dollar Equivalent of the aggregate
principal amount of the Alternative Currency Loans then outstanding (after
giving effect to any Alternative Currency Loans made or repaid on such date) and
(ii) notify the Borrowers of the results of such determination.
SECTION 1.04. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurocurrency Loan") or by Class
and Type (e.g., a "Eurocurrency Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Credit Borrowing") or by
Type (e.g., a "Eurocurrency Borrowing") or by Class and Type (e.g., a
"Eurocurrency Revolving Credit Borrowing").
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
and relying upon the representations and warranties herein set forth, each
Lender agrees, severally and not jointly, (a) to make a Term Loan to (i) JCI, in
Dollars, on the Closing Date in an aggregate principal amount not to exceed 40%
of its Term Loan Commitment and (ii) DCJ, in Dollars, on the Closing Date in an
aggregate principal amount not to exceed 60% of its Term Loan Commitment, and
(b) to make Revolving Loans to either Borrower, at any time and from time to
time on or after the Closing Date, and until the earlier of the Maturity Date
and the termination of the Revolving Credit Commitment of such Lender in
accordance with the terms hereof, in Dollars or one or more Alternative
Currencies (as specified in the Borrowing Requests with respect thereto), in an
aggregate principal amount (determined as of the date of each Revolving Credit
Borrowing) that will not result in (i) such Lender's Revolving Credit Exposure
exceeding such Lender's Revolving Credit Commitment, (ii) the DCJ Revolving
Credit Exposure exceeding the DCJ Maximum Percentage of the Total Revolving
Credit Commitment or (iii) the Aggregate Alternative Currency Revolving Credit
Exposure exceeding $20,000,000. Within the limits set forth in clause (b) of the
preceding sentence and subject to the terms, conditions and limitations set
forth herein, each Borrower may borrow, pay or prepay and reborrow Revolving
Loans. Amounts paid or prepaid in respect of Term Loans may not be reborrowed.
27
SECTION 2.02. Loans. (a) Each Loan (other than a Swingline
Loan) shall be made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their applicable Commitments; provided,
however, that the failure of any Lender to make any Loan shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). Except
for Loans deemed made pursuant to Section 2.02(f), Loans made pursuant to
Sections 2.22 (d) and 2.23(e) and Swingline Loans, the Loans comprising any
Borrowing shall be in an aggregate principal amount that is (i) an integral
multiple of $1,000,000 (or the Alternative Currency Equivalent thereof) and not
less than $5,000,000 (or the Alternative Currency Equivalent thereof) or (ii)
equal to the remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.02(f), 2.08, 2.10(iv) and 2.15,
(i) each Borrowing denominated in Dollars shall be comprised of ABR Loans or
Eurocurrency Loans as the applicable Borrower may request pursuant to Section
2.03 and (ii) each Alternative Currency Borrowing shall be comprised entirely of
Eurocurrency Loans. Each Lender may at its option make any Eurocurrency Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan, provided that any exercise of such option shall not affect the obligation
of the applicable Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that no Borrower shall be entitled to request any
Borrowing that, if made, would result in more than 8 Eurocurrency Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods or denominated in different currencies,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.
(c) Except with respect to Loans made pursuant to Section
2.02(f), Section 2.22(d) and Section 2.23(e), each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to such account as the Administrative Agent may
designate not later than 10:00 a.m., New York City time, in the case of fundings
to an account in New York City, or 10:00 a.m., local time, in the case of
fundings to an account in another jurisdiction, and the Administrative Agent
shall, promptly upon receipt thereof, credit the amounts so received to an
account designated by the applicable Borrower in the applicable Borrowing
Request or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower on such
date a corresponding amount in the required currency. If the Administrative
Agent shall have so made funds available then, to the extent that such Lender
shall not have made such portion available to the Administrative Agent, such
Lender and (if such amount is not made available by the applicable Lender within
three Business Days of the date of the applicable Borrowing) the applicable
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon in such
currency, for each day from
28
the date such amount is made available to such Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of such
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short-term funds in
the relevant currency (which determination shall be conclusive absent manifest
error). If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request any Eurocurrency
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
(f) If the Issuing Bank shall not have received from the
applicable Borrower the payment required to be made by Section 2.22(e) within
the time specified in such Section, the Issuing Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent will
promptly notify each Revolving Credit Lender of such L/C Disbursement and its
Pro Rata Percentage thereof. In the case of Letters of Credit denominated in
Dollars, each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Credit Lender shall have received
such notice later than 12:00 (noon), New York City time, on any day, not later
than 10:00 a.m., New York City time, on the immediately following Business Day),
an amount in Dollars equal to such Lender's Pro Rata Percentage of such L/C
Disbursement (it being understood that such amount shall be deemed to constitute
an ABR Revolving Loan of such Lender and such payment shall be deemed to have
reduced the L/C Exposure), and the Administrative Agent will promptly pay to the
Issuing Bank amounts so received by it from the Revolving Credit Lenders. In the
case of Letters of Credit denominated in an Alternative Currency, each Revolving
Credit Lender shall pay by wire transfer of immediately available funds to the
Administrative Agent not later than 2:00 p.m., London time, on such date (or if
such Revolving Credit Lender shall have received such notice later than 12:00
(noon), local time in the country of the Alternative Currency, on the
immediately following Business Day), an amount in such Alternative Currency
equal to such Lender's Pro Rata Percentage of such L/C Disbursement (it being
understood that such amount shall be deemed to constitute an Alternative
Currency Revolving Loan bearing interest at the relevant Foreign Base Rate of
such Lender and such payment shall be deemed to have reduced the L/C Exposure),
and the Administrative Agent will promptly pay to the Issuing Bank amounts so
received by it from the Revolving Credit Lenders. The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from the Borrowers
with respect to the reimbursement of any payment of a draft under a Letter of
Credit prior to the time that any Revolving Credit Lender makes any payment
pursuant to this paragraph (f); any such amounts received by the Administrative
Agent thereafter from the applicable Borrower will be promptly remitted by the
Administrative Agent to the Revolving Credit Lenders that shall have made such
payments and to the Issuing Bank, as their interests may appear. If any
Revolving Credit Lender shall not have made its Pro Rata Percentage of such L/C
Disbursement available to the Administrative Agent as provided above, such
Lender and (if such amount is not made available by the applicable Lender within
three Business Days of the date of the applicable Borrowing) the applicable
Borrower agrees to pay interest on such amount, for each day from and including
the date such amount is required to be paid in accordance with this paragraph to
but excluding the date such amount is paid, to the Administrative Agent for the
account of the Issuing Bank at (i) in the case of the Borrower, a rate per annum
equal to the interest rate applicable to
29
Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such
Lender, for the first such day, a rate determined by the Administrative Agent to
represent its cost of overnight funds in the applicable currency, and for each
day thereafter, (x) if such L/C Disbursement is denominated in Dollars, the
Alternate Base Rate, and (y) if such L/C Disbursement is denominated in an
Alternative Currency, the applicable Foreign Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a
Borrowing (other than a Swingline Loan, a deemed Borrowing pursuant to Section
2.02(f) or a Loan made pursuant to Section 2.22(d) or Section 2.23(e), as to
which this Section 2.03 shall not apply), the applicable Borrower shall deliver
to the Administrative Agent a duly completed Borrowing Request (or telephone the
Administrative Agent, promptly confirmed with a written (including by telecopy)
and duly completed Borrowing Request) (a) in the case of a Eurocurrency
Borrowing, not later than 12:30 p.m., New York City time, three Business Days
(or, if such Borrowing is to be an Alternative Currency Borrowing, 12:30 p.m.,
New York time, four Business Days) before a proposed Borrowing, and (b) in the
case of an ABR Borrowing, not later than 12:30 p.m., New York City time, one
Business Day before a proposed Borrowing. Each Borrowing Request (including a
telephonic Borrowing Request) shall be irrevocable, shall be signed by or on
behalf of the applicable Borrower and shall specify the following information:
(i) whether the Borrowing then being requested is to be a Term Borrowing or a
Revolving Credit Borrowing; (ii) the currency of such Borrowing (which shall be
Dollars or an Alternative Currency); (iii) if such Borrowing is to be
denominated in Dollars, whether such Borrowing is to be a Eurocurrency Borrowing
or an ABR Borrowing; (iv) the date of such Borrowing (which shall be a Business
Day); (v) the number and location of the account to which funds are to be
disbursed; (vi) the amount of such Borrowing (which shall be expressed in
Dollars, regardless of whether such Borrowing is an Alternative Currency
Borrowing); and (vii) if such Borrowing is to be a Eurocurrency Borrowing, the
initial Interest Period with respect thereto; provided, however, that,
notwithstanding any contrary specification in any Borrowing Request, each
requested Borrowing shall comply with the requirements set forth in Section
2.02. If no election as to the currency of Borrowing is specified in any such
notice, then the requested Borrowing shall be denominated in Dollars. If no
election as to the Type of Borrowing is specified in any such notice, then the
requested Borrowing shall be an ABR Borrowing if denominated in Dollars or a
Eurocurrency Borrowing if denominated in an Alternative Currency. If no Interest
Period with respect to any Eurocurrency Borrowing is specified in any such
notice, then the applicable Borrower shall be deemed to have selected an
Interest Period of one month's duration. The Administrative Agent shall promptly
advise the applicable Lenders of any notice given pursuant to this Section 2.03
(and the contents thereof), and of each Lender's portion of the requested
Borrowing and the account to which Loans comprising the requested Borrowing are
to be wired.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) Each
Borrower hereby unconditionally promises, severally and not jointly, to pay to
the Administrative Agent for the account of the Swingline Lender or each other
Lender entitled thereto (i) the then unpaid principal amount of each Swingline
Loan, on the last day of the Interest Period applicable to such Loan or, if
earlier, on the Maturity Date and (ii) on the dates and in the amounts provided
in Section 2.11 (subject to adjustment as specified herein), the principal
amount of each Term Loan of such Lender made to such Borrower. Each Borrower
hereby unconditionally promises, severally and not jointly, to pay to the
Administrative Agent for the account of each Lender, on the Maturity Date, the
then unpaid principal amount of each Revolving Loan of such Lender made to such
Borrower.
30
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of each
Borrower to such Lender resulting from each Loan made by such Lender to such
Borrower from time to time, including the amounts of principal and interest
payable and paid to such Lender by each such Borrower from time to time under
this Agreement.
(c) The Administrative Agent shall maintain accounts in
which it will record (i) the amount of each Loan made to each Borrower
hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from each Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder from each Borrower or any
Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant
to paragraphs (b) and (c) above shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations
therein recorded absent manifest error; provided, however, that the failure of
any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the applicable
Borrower to repay the Loans to it in accordance with the terms hereof.
(e) Prior to the Closing Date (or if any Lender becomes a
Lender after the Closing Date, prior to the date such Lender becomes a Lender),
any Lender may through the Administrative Agent request that Loans made by it to
a Borrower be evidenced by a promissory note, substantially in the form of
Exhibit N-1 and/or N-2 (each, a "Note"). In such event, the applicable Borrower
shall execute and deliver to such Lender a Note payable to such Lender.
SECTION 2.05. Fees. (a) The Borrowers agree, severally and not
jointly in the respective proportions set forth in the next succeeding sentence,
to pay to the Administrative Agent for the account of Revolving Credit Lenders,
on the last Business Day of March, June, September and December in each year and
on each date on which the Commitments of all Lenders shall expire or be
terminated as provided herein, a commitment fee (a "Commitment Fee") equal to
the Applicable Percentage per annum in effect from time to time on the average
daily unused amount of the Commitments (excluding the Swingline Commitment) of
such Lender during the preceding quarter (or other period commencing with the
Closing Date (for purposes of this Section 2.05, the aggregate amount of the L/C
Exposure shall be deemed used Commitments) or ending with the Maturity Date or
the date on which the Commitments of all Lenders shall expire or be terminated).
JCI shall be responsible for 40% of such Commitment Fees and DCJ shall be
responsible for 60% of such Commitment Fees. All Commitment Fees shall be
computed on the basis of the actual number of days elapsed in a year of 365 or
366 days, as the case may be. The Commitment Fee due to each Lender shall
commence to accrue on the Closing Date and shall cease to accrue on the date on
which the Commitment of such Lender shall expire or be terminated as provided
herein. For purposes of calculating the Commitment Fees only, no portion of the
Revolving Credit Commitments shall be deemed utilized under Section 2.17 as a
result of outstanding Swingline Loans.
(b) The Borrowers agree, severally and not jointly in the
respective proportions set forth in the next succeeding sentence, to pay to the
Administrative Agent, for its own account, the administrative fees set forth in
the Fee Letter at the times and in the amounts specified therein (the
"Administrative Agent Fees") and to otherwise comply with the fourth paragraph
of the Fee Letter. JCI shall be responsible for 40% of the
31
Administrative Agent Fees and DCJ shall be responsible for 60% of such
Administrative Agent Fees.
(c) Each Borrower agrees, severally and not jointly, (i)
to pay to the Administrative Agent for the account of each Revolving Credit
Lender, on the last Business Day of March, June, September and December of each
year and on the date on which the Revolving Credit Commitments of all Lenders
shall be terminated as provided herein (each such date, an "L/C Fee Payment
Date"), a fee (an "L/C Participation Fee") calculated on such Lender's Pro Rata
Percentage of the average daily aggregate L/C Exposure (excluding the portion
thereof attributable to unreimbursed L/C Disbursements) during the preceding
quarter (or shorter period commencing with the Closing Date or ending with the
Maturity Date or the date on which all Letters of Credit have been canceled or
have expired and the Revolving Credit Commitments of all Lenders shall have been
terminated) in respect of Letters of Credit issued for the account of such
Borrower at a rate equal to the Applicable Percentage from time to time used to
determine the interest rate on Revolving Credit Borrowings comprised of
Eurocurrency Loans pursuant to Section 2.06, (ii) to pay to the Issuing Bank a
fronting fee (the "Issuing Bank Fees") with respect to each Letter of Credit
issued by such Issuing Bank (payable in arrears), computed for the period from
and including the date of issuance of such Letter of Credit to the expiration
date of such Letter of Credit on each L/C Fee Payment Date, equal to 0.25% per
annum of the aggregate undrawn face amount of Letters of Credit outstanding
which were issued by such Issuing Bank, and (iii) to pay or reimburse the
Issuing Bank for such normal and customary costs and expenses as are incurred or
charged by such Issuing Bank in issuing, effecting payment under, amending or
otherwise administering any Letter of Credit issued by it. All L/C Participation
Fees and Issuing Bank Fees shall be computed on the basis of the actual number
of days elapsed in a year of 365 or 366 days, as the case may be.
(d) All Fees shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, if
and as appropriate, among the Lenders, except that the Issuing Bank Fees and the
Issuing Bank's costs and expenses described in Section 2.05(c)(iii) shall be
paid directly to the Issuing Bank.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions
of Section 2.07, the Loans comprising each ABR Borrowing, including each
Swingline Loan, shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days, as the case may be, when the
Alternate Base Rate is determined by reference to the Prime Rate and over a year
of 360 days at all other times) at a rate per annum equal to the Alternate Base
Rate plus the Applicable Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurocurrency Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the Adjusted LIBOR for the Interest Period in effect for such
Borrowing plus the Applicable Percentage in effect from time to time.
(c) Subject to the provisions of Section 2.07, each
Foreign Base Rate Loan shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 days) at a rate per annum equal to the
Foreign Base Rate.
(d) Interest on each Loan shall be payable on the
Interest Payment Dates applicable to such Loan except as otherwise provided in
this Agreement. The
32
applicable Alternate Base Rate, Adjusted LIBOR or Foreign Base Rate for each
Interest Period or day within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
(e) Interest on each Alternative Currency Borrowing shall
be payable in the applicable Alternative Currency.
SECTION 2.07. Default Interest. If a Borrower shall default in
the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, by acceleration or otherwise, such Borrower shall on
demand from time to time pay interest, to the extent permitted by law, on such
defaulted amount from the date of such defaulted payment to but excluding the
date of actual payment (to the extent lawful, after as well as before judgment)
(a) in the case of overdue principal, at the rate otherwise applicable to such
Loan pursuant to Section 2.06 plus 2.00% per annum and (b) in all other cases,
at a rate per annum (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, when determined by reference
to the Prime Rate and over a year of 360 days at all other times) equal to (i)
if such amount is payable in Dollars, the sum of the rate that would be
applicable to an ABR Loan plus 2.00% and (ii) if such amount is payable in an
Alternative Currency, the sum of the applicable Foreign Base Rate plus 2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, that
on the day two Business Days prior to the commencement of any Interest Period
for a Eurocurrency Borrowing the Administrative Agent shall have reasonably
determined that (a) deposits in the principal amounts of the Alternative
Currency Loans comprising such Borrowing are not generally available in the
London or other relevant interbank market, or (b) by reason of circumstances
affecting the relevant market, reasonable means do not exist for ascertaining
Adjusted LIBOR, the Administrative Agent shall, as soon as practicable
thereafter, give written (including telecopy) notice of such determination to
the Borrowers and the Lenders. In the event of any such determination, until the
Administrative Agent shall have advised the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) if the conditions
specified in clause (b) above exist, any request by a Borrower for a
Eurocurrency Borrowing denominated in Dollars pursuant to Section 2.03, or to
continue any Eurocurrency Borrowing denominated in Dollars for another Interest
Period or to convert an ABR Borrowing to a Eurocurrency Borrowing pursuant to
Section 2.10, shall be deemed to be a request for an ABR Borrowing and (ii) if
the conditions specified in clause (a) above exist, any request for an
Alternative Currency Borrowing shall be rejected. Each determination by the
Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a)
The Term Loan Commitments shall automatically terminate at 5:00 p.m., New York
City time, on the Closing Date. The Revolving Credit Commitments, the L/C
Commitment and the Swingline Commitment shall automatically terminate on the
Maturity Date. Notwithstanding the foregoing, all the Commitments shall
automatically terminate at 5:00 p.m., New York City time, on June 15, 2003, if
the first Credit Event as contemplated by Section 4.02 below shall not have
occurred by such time.
(b) Within one Business Day of entering into any Mexican
Financing Agreement, the Total Revolving Credit Commitment shall be reduced by
the Dollar Equivalent of the maximum committed amount that may be extended
thereunder. Promptly following any reduction to the Total Revolving Credit
Commitment under this
33
Section 2.09(b), the Administrative Agent shall notify the Borrowers and the
Lenders of the amount of the Total Revolving Credit Commitment and of the new
DCJ Maximum Percentage, such determinations being conclusive absent manifest
error.
(c) Upon at least three Business Days' prior irrevocable
written (including telecopy) or telephone notice (which notice shall be
confirmed promptly in writing) to the Administrative Agent, the Borrowers may at
any time in whole permanently terminate, or from time to time in part
permanently reduce, the Term Loan Commitments or the Revolving Credit
Commitments; provided, however, that (i) each partial reduction of the Term Loan
Commitments or the Revolving Credit Commitments shall be in an integral multiple
of $500,000 and in a minimum amount of $2,500,000, (ii) the Total Revolving
Credit Commitment shall not be reduced to the extent that, after giving effect
thereto, the DCJ Revolving Credit Exposure would exceed the DCJ Maximum
Percentage of the Total Revolving Credit Commitment and (iii) the Total
Revolving Credit Commitment shall not be reduced to an amount that is less than
the Aggregate Revolving Credit Exposure at the time.
(d) Each reduction in the Term Loan Commitments or the
Revolving Credit Commitments hereunder shall be made ratably among the Lenders
in accordance with their respective applicable Commitments.
SECTION 2.10. Conversion and Continuation of Borrowings. Each
Borrower shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:30 p.m., New York City time, one
Business Day prior to conversion, to convert any Eurocurrency Borrowing
denominated in Dollars into an ABR Borrowing, (b) not later than 12:30 p.m., New
York City time, three Business Days (or in the case of an Alternative Currency
Borrowing, four Business Days) prior to conversion or continuation, to convert
any ABR Borrowing into a Eurocurrency Borrowing denominated in Dollars or to
continue any Eurocurrency Borrowing as a Eurocurrency Borrowing in the same
currency for an additional Interest Period, and (c) not later than 12:30 p.m.,
New York City time, three Business Days (or in the case of an Alternative
Currency Borrowing, four Business Days) prior to conversion, to convert the
Interest Period with respect to any Eurocurrency Borrowing to another
permissible Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal amounts of the
Loans comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing shall
satisfy the limitations specified in Sections 2.02(a) and 2.02(b) regarding the
principal amount and maximum number of Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new Loan of
such Lender resulting from such conversion and reducing the Loan (or portion
thereof) of such Lender being converted by an equivalent principal amount;
(iv) if any Eurocurrency Borrowing is converted at a time
other than the end of the Interest Period applicable thereto, the applicable
Borrower shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.16; and
34
(v) upon notice to the Borrower from the Administrative Agent
given at the request of the Required Lenders, after the occurrence and during
the continuance of an Event of Default (such notice stating that the Required
Lenders have determined that a conversion to, or continuance of a Borrowing as,
a Eurocurrency Borrowing is not appropriate), (x) no outstanding Borrowing
denominated in Dollars may be converted into, or continued as, a Eurocurrency
Borrowing, (y) unless repaid, each Eurocurrency Borrowing denominated in Dollars
shall be converted to an ABR Borrowing at the end of the Interest Period
applicable thereto and (z) no Interest Period in excess of one month may be
selected for any Alternative Currency Borrowing.
Each notice pursuant to this Section 2.10 shall be irrevocable
and shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the applicable Borrower requests be converted or continued, (ii)
whether such Borrowing is to be converted to or continued as a Eurocurrency
Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion, the
date of such conversion (which shall be a Business Day) and (iv) if such
Borrowing is to be converted to or continued as a Eurocurrency Borrowing, the
Interest Period with respect thereto. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a Eurocurrency
Borrowing, the applicable Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall advise the
Lenders of any notice given pursuant to this Section 2.10 and of each Lender's
portion of any converted or continued Borrowing. If the applicable Borrower
shall not have given notice in accordance with this Section 2.10 to continue any
Borrowing into a subsequent Interest Period (and shall not otherwise have given
notice in accordance with this Section 2.10 to convert such Borrowing), such
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), (i) in the case of a Borrowing denominated
in Dollars, automatically be continued as an ABR Borrowing and (ii) in the case
of an Alternative Currency Borrowing, automatically be continued into a new
Interest Period of one month. Notwithstanding any contrary provisions herein,
the currency of an outstanding Borrowing may not be changed in connection with
any conversion or continuation of such Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a)(i) JCI shall
pay to the Administrative Agent, for the account of the Lenders, on the dates
set forth below, or if any such date is not a Business Day, on the next
preceding Business Day, a principal amount of the Term Loans (as adjusted from
time to time pursuant to Sections 2.12(b) and 2.13(e)) made to JCI equal to the
amount set forth below opposite such date, together in each case with accrued
and unpaid interest on the principal amount to be paid to but excluding the date
of such payment:
Date Amount
---- ------
September 30, 2003 $ 500,000
December 31, 2003 500,000
March 31, 2004 750,000
June 30, 2004 750,000
September 30, 2004 750,000
December 31, 2004 750,000
March 31, 2005 1,000,000
June 30, 2005 1,000,000
35
Date Amount
---- ------
September 30, 2005 1,000,000
December 31, 2005 1,000,000
March 31, 2006 1,000,000
June 30, 2006 1,000,000
September 30, 2006 1,000,000
December 31, 2006 1,000,000
March 31, 2007 1,250,000
June 30, 2007 1,250,000
September 30, 2007 1,250,000
December 31, 2007 1,250,000
March 31, 2008 1,500,000
Maturity Date 1,500,000
(ii) DCJ shall pay to the Administrative Agent, for the
account of the Lenders, on the dates set forth below or, if any such date is not
a Business Day, on the next preceding Business Day (each such date referred to
in this clause (ii) and in clause (i) above being a "Repayment Date"), a
principal amount of the Term Loans (as adjusted from time to time pursuant to
Sections 2.12(b) and 2.13(e)) made to DCJ equal to the amount set forth below
opposite such date, together in each case with accrued and unpaid interest on
the principal amount to be paid to but excluding the date of such payment:
Date Amount
---- ------
September 30, 2003 $ 750,000
December 31, 2003 750,000
March 31, 2004 1,125,000
June 30, 2004 1,125,000
September 30, 2004 1,125,000
December 31, 2004 1,125,000
March 31, 2005 1,500,000
June 30, 2005 1,500,000
September 30, 2005 1,500,000
December 31, 2005 1,500,000
March 31, 2006 1,500,000
June 30, 2006 1,500,000
September 30, 2006 1,500,000
December 31, 2006 1,500,000
March 31, 2007 1,875,000
June 30, 2007 1,875,000
September 30, 2007 1,875,000
December 31, 2007 1,875,000
36
Date Amount
---- ------
March 31, 2008 2,250,000
Maturity Date 2,250,000
(b) To the extent not previously paid, all Term Loans
shall be due and payable on the Maturity Date, together with accrued and unpaid
interest on the principal amount to be paid to but excluding the date of
payment.
(c) All repayments pursuant to this Section 2.11 shall be
subject to Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.12. Prepayment. (a) Each and either Borrower shall
have the right at any time and from time to time to prepay any Borrowing, in
whole or in part, without premium or penalty (except as provided in Section
2.16), upon prior written or telecopy notice (or telephone notice promptly
confirmed by written (including telecopy) notice) to the Administrative Agent
(i) in the case of a prepayment of a Eurocurrency Borrowing, given before 12:30
p.m., New York City time, three Business Days (or, in the case of prepayment of
an Alternative Currency Borrowing, four Business Days) before such prepayment
and (ii) in the case of a prepayment of ABR Loans or Foreign Base Rate Loans,
given before 12:30 p.m., New York City time, one Business Day before such
prepayment; provided, however, that each partial prepayment shall be in an
amount that is an integral multiple of $500,000 (or the Alternative Currency
Equivalent thereof) and not less than $2,500,000 (or the Alternative Currency
Equivalent thereof).
(b) Optional prepayments of Term Loans by a Borrower
shall be applied (i) first, against the remaining scheduled installments of
principal due in respect of the Term Loans of such Borrower under Section
2.11(a)(i) or (ii), as the case may be, in the next twelve months in the order
of maturity and (ii) second, pro rata against the remaining scheduled
installments of principal due in respect of such Term Loans.
(c) Each notice of prepayment shall specify the
prepayment date and the principal amount of each Borrowing (or portion thereof)
to be prepaid, shall be irrevocable and shall commit the applicable Borrower to
prepay such Borrowing by the amount stated therein on the date stated therein.
All prepayments under this Section 2.12 shall be subject to Section 2.16 but
otherwise without premium or penalty. All prepayments under this Section 2.12
shall be accompanied by accrued interest on the principal amount being prepaid
to but excluding the date of payment.
SECTION 2.13. Mandatory Prepayments. (a) In the event of any
termination of all the Revolving Credit Commitments pursuant to Section 2.09,
each Borrower shall repay or prepay all its outstanding Revolving Credit
Borrowings and all outstanding Swingline Loans on the date of such termination.
In the event of any partial reduction of the Revolving Credit Commitments
pursuant to Section 2.09, then at or prior to the effective date of such
reduction, the Administrative Agent shall notify the Borrowers and the Revolving
Credit Lenders of the Aggregate Revolving Credit Exposure and the Aggregate
Alternative Currency Revolving Credit Exposure after giving effect thereto and
the portion of the Aggregate Revolving Credit Exposure and the Aggregate
Alternative Currency Revolving Credit Exposure attributable to each Borrower. If
at any time, as a result of such a partial reduction or termination, as a result
of fluctuations in exchange rates or otherwise, if (i) the Aggregate Revolving
Credit Exposure would exceed the Total Revolving Credit Commitment, (ii) the
Aggregate Alternative Currency Revolving Credit Exposure would exceed
$22,000,000 or (iii) the
37
DCJ Revolving Credit Exposure would exceed the DCJ Maximum Percentage of the
Total Revolving Credit Commitment, then the Borrowers shall (x) on the date of
such reduction or termination of Revolving Credit Commitments or (y) within four
Business Days following notice from the Administrative Agent of any such
fluctuation in exchange rate or otherwise, repay or prepay Revolving Credit
Borrowings or Swingline Loans in an amount sufficient to eliminate such excess.
For purposes of clauses (i) and (iii) in the immediately preceding sentence, the
Aggregate Alternative Revolving Credit Exposure shall be calculated by reference
to the Dollar Equivalent of each amount denominated in an Alternative Currency,
such Dollar Equivalent to be determined as of the date such Alternative Currency
liability was incurred.
(b) The Borrowers shall repay Term Loans in accordance
with Section 2.13(e) by the amount equal to the aggregate amount of Net Proceeds
(minus any Reinvested Amount relating thereto) received by Parent or any of its
Subsidiaries from (i) the sale, transfer or other disposition by Parent or any
of its Subsidiaries of any property or assets of Parent or any of its
Subsidiaries to any Person (other than to the Parent or any Subsidiary thereof)
pursuant to Section 6.05(i); (ii) the sale or other disposition of any Capital
Stock, property or assets of any Foreign Subsidiary existing on the Closing Date
(other than DCJ, any Mexican Subsidiary which is a Subsidiary Guarantor, Jafra
Cosmetics Dominicana S.A., CDRJ Europe Holding Company B.V. or any Subsidiary of
CDRJ Europe Holding Company B.V. existing on the Closing Date), or of any
property or assets of any other Subsidiary existing on the Closing Date that are
used in any business or operations conducted in any jurisdiction other than the
United States, Mexico, the Dominican Republic and Europe pursuant to Section
6.05(l); or (iii) the recovery by Parent or any of its Subsidiaries of amounts
owing to it under property insurance policies if Parent and its Subsidiaries
have not commenced replacement of the property on account of which such amounts
were paid within one year of the later of the date of the casualty to, or
condemnation of, such property or the receipt of such Net Proceeds, provided
that, notwithstanding the foregoing, any such repayment of the Term Loans
pursuant to this Section 2.13(b) shall only be required upon any such sale or
transfer or recovery to the extent the Net Proceeds received therefrom, when
aggregated with the Net Proceeds received from all such sales or transfers or
recoveries in the immediately preceding twelve-month period and minus all
applicable Reinvested Amounts relating to all such Net Proceeds, exceed
$5,000,000. The applicable Borrower shall make any prepayment pursuant to this
Section 2.13(b) as promptly as practicable (and in any event, within three
Business Days) following the date of receipt of any such Net Proceeds (except
that if any such Net Proceeds are eligible to be reinvested in accordance with
the definition of the term "Reinvested Amount" and neither Parent nor any such
Borrower has elected to reinvest such proceeds, such prepayment shall be made on
the earlier of (x) the date on which the certificate of a Responsible Officer of
Parent or such Borrower to such effect is delivered to the Administrative Agent
in accordance with such definition and (y) the last day of the period within
which a certificate setting forth such election is required to be delivered in
accordance with such definition).
(c) On the Business Day following the date on which the
financial statements with respect to a fiscal year are delivered pursuant to
Section 5.01(a), the Borrowers shall prepay outstanding Term Loans in accordance
with Section 2.13(e) in an aggregate principal amount equal to 50% of Excess
Cash Flow for the fiscal year then ended (or, in the case of the fiscal year
ended December 31, 2003, the period commencing on July 1, 2003, and ending on
December 31, 2003); provided, however, that no such prepayment shall be required
if the Consolidated Leverage Ratio as of the end of such fiscal year shall be
less than 3.00 to 1.00.
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(d) In the event that Parent or any Subsidiary shall
receive Net Proceeds from the issuance or other disposition of Indebtedness for
money borrowed (other than Indebtedness for money borrowed permitted pursuant to
Section 6.01), the Borrowers shall, as promptly as practicable upon (and in any
event not later than the third Business Day next following) the receipt of such
Net Proceeds, apply an amount equal to 100% of such Net Proceeds to prepay
outstanding Term Loans in accordance with Section 2.13(e).
(e) Each prepayment of outstanding Term Loans required to
be made pursuant to any paragraph of this Section 2.13 shall be applied (i)
first against the remaining scheduled installments of principal due in respect
of the Term Loans of the applicable Borrower under Section 2.11(a)(i) or (ii),
as the case may be, in the next twelve months in the order of maturity and (ii)
second pro rata against the remaining scheduled installments of principal due in
respect of such Term Loans. To the extent that Excess Cash Flow for any fiscal
year required to be used to prepay Term Loans pursuant to Section 2.13(c) is
attributable (as reasonably determined by Parent) to one Borrower and its
Subsidiaries (as opposed to the other Borrower and its Subsidiaries), then such
Excess Cash Flow shall be used to prepay the Term Loans of such Borrower in
accordance with this Section 2.13(e).
(f) Parent shall deliver to the Administrative Agent, at
the time of each prepayment required under this Section 2.13, (i) a certificate
signed by a Financial Officer of Parent setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent reasonably
practicable, at least three days prior written notice of such prepayment. Each
notice of prepayment shall specify the prepayment date, the Type of each Loan
being prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All prepayments of Borrowings under this Section 2.13 shall be subject
to Section 2.16, but shall otherwise be without premium or penalty.
(g) Unless the Borrowers otherwise elect, amounts to be
applied pursuant to this Section 2.13 to the prepayment of Term Loans and/or
Revolving Loans shall be applied, as applicable, first to reduce outstanding ABR
Term Loans and ABR Revolving Loans, as the case may be. Any amounts remaining
after each such application shall, at the option of the applicable Borrower, be
applied to prepay Eurocurrency Term Loans or Eurocurrency Revolving Loans, as
the case may be, immediately and/or shall be deposited in the Prepayment Account
(as defined below). The Administrative Agent shall apply any cash deposited in
the Prepayment Account (i) allocable to Term Loans to prepay Eurocurrency Term
Loans and (ii) allocable to Revolving Loans to prepay Eurocurrency Revolving
Loans, in each case on the last day of their respective Interest Periods (or, at
the direction of Borrowers, on any earlier date) until all outstanding Term
Loans or Revolving Loans, as the case may be, have been prepaid to the extent
required by Section 2.13 or until all the allocable cash on deposit with respect
to such Loans has been exhausted and thereupon any balance remaining in the
Prepayment Account shall be disbursed to the applicable Borrower. For purposes
of this Agreement, the term "Prepayment Account" shall mean an account
established by the Borrowers with the Administrative Agent and over which the
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal for application in accordance with this paragraph
(g). The Administrative Agent will, at the request of Borrowers, invest amounts
on deposit in the Prepayment Account in Cash Equivalents that mature prior to
the last day of the applicable Interest Periods of the Eurocurrency Term
Borrowings or Eurocurrency Revolving Credit Borrowings to be prepaid, as the
case may be; provided, however, that (i) the Administrative Agent shall not be
required to make any investment that, in its sole judgment, would require or
cause
39
the Administrative Agent to be in, or would result in any, violation of any law,
statute, rule or regulation and (ii) the Administrative Agent shall have no
obligation to invest amounts on deposit in the Prepayment Account if a Event of
Default pursuant to Section 7.01 or Section 7.02(a) shall have occurred and be
continuing. Any losses that may result from such investments shall not relieve
the applicable Borrower from its obligation to prepay Eurocurrency Borrowings on
the last day of the applicable Interest Period. Other than any interest earned
on such investments, the Prepayment Account shall not bear interest. Interest or
profits, if any, on such investments shall be deposited in the Prepayment
Account and reinvested and disbursed as specified above, except to the extent
necessary to make the applicable prepayment required by Section 2.13. If the
maturity of the Loans has been accelerated pursuant to Article VII, the
Administrative Agent may, in its sole discretion, apply all amounts on deposit
in the Prepayment Account to satisfy any of the Obligations. Each Borrower
hereby grants to the Administrative Agent, for its benefit and the benefit of
the Secured Parties, a security interest in the Prepayment Account to secure the
Obligations.
SECTION 2.14. Requirements of Law. (a) If the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof applicable to any Lender (which term shall include the Issuing Bank in
this Section 2.14) or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof (or, if later, the
date on which such Lender becomes a Lender):
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to any Letter of Credit or any Eurocurrency Loan made by it or its
obligation to make Eurocurrency Loans or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
(including Non-Excluded Taxes described in Section 2.20(b) and changes in taxes
measured by or imposed upon the overall net income, or franchise taxes, or taxes
measured by or imposed upon overall capital or net worth, or branch taxes (in
the case of such capital, net worth or branch taxes, imposed in lieu of such net
income tax), of such Lender or its applicable lending office, branch, or any
affiliate thereof);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender which is not otherwise included in the determination of Adjusted
LIBOR hereunder; or
(iii) shall impose on such Lender any other condition
excluding any tax of any kind whatsoever;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurocurrency Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrowers from such Lender,
through the Administrative Agent, in accordance herewith, the applicable
Borrower shall promptly pay such Lender, upon its demand, any additional amount
or amounts necessary to compensate such Lender for such increased cost or
reduced amount receivable with respect to such Eurocurrency Loans or Letters of
Credit, provided that, in any such case, such Borrower may elect to convert
Eurocurrency Loans made by such Lender hereunder to ABR Loans by giving the
Administrative Agent at least one Business Day's notice of such election, in
which
40
case such Borrower shall promptly pay to such Lender, upon demand, without
duplication, amounts theretofore required to be paid to such Lender pursuant to
this Section 2.14(a) and such amounts, if any, as may be required pursuant to
Section 2.16. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.14(a), it shall provide prompt notice thereof to the
applicable Borrower, through the Administrative Agent, certifying (i) that one
of the events described in this Section 2.14(a) has occurred and describing in
reasonable detail the nature of such event, (ii) as to the increased cost or
reduced amount resulting from such event and (iii) as to the additional amount
demanded by such Lender and a reasonably detailed explanation of the calculation
thereof.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority, in each case, made subsequent to the Closing Date (or, if later, the
date on which such Lender becomes a Lender) shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of such Lender's obligations hereunder or under any Letter of Credit
to a level below that which such Lender or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, within ten
Business Days after submission by such Lender to the Borrowers (with a copy to
the Administrative Agent) of a written request therefor certifying (i) that one
of the events described in this Section 2.14(b) has occurred and describing in
reasonable detail the nature of such event, (ii) as to the reduction of the rate
of return on capital resulting from such event and (iii) as to the additional
amount or amounts demanded by such Lender or corporation and a reasonably
detailed explanation of the calculation thereof, the applicable Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or corporation for such reduction.
(c) Any certificate provided pursuant to paragraph (a) or
(b) above as to any additional amounts payable pursuant to this Section 2.14
submitted by such Lender, through the Administrative Agent, to the Borrowers
shall be conclusive in the absence of manifest error. The agreements in this
Section 2.14 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
SECTION 2.15. Change in Legality. (a) Notwithstanding any
other provision of this Agreement, if, after the date hereof, (i) any change in
any Requirement of Law or in the interpretation or application thereof shall
make it unlawful for any Lender to make or maintain any Eurocurrency Loan or to
give effect to its obligations as contemplated hereby with respect to any
Eurocurrency Loan or participations in Letters of Credit denominated in an
Alternative Currency, or shall make it unlawful for the Issuing Bank to issue
Letters of Credit denominated in an Alternative Currency, or (ii) there shall
have occurred any change in national or international financial, political or
economic conditions (including the imposition of or any change in exchange
controls) or currency exchange rates which would make it impracticable for any
Lender to make Loans denominated in such Alternative Currency to, or to issue
Letters of Credit denominated in such Alternative Currency for the account of, a
Borrower, then by prompt written notice thereof to the Borrowers and to the
Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist):
41
(i) such Lender may declare that Eurocurrency Loans or
Alternative Currency Loans (in the affected currency or currencies), as the case
may be, will not thereafter (for the duration of such unlawfulness) be made by
such Lender hereunder (or be continued for additional Interest Periods and ABR
Loans and Foreign Base Rate Loans will not thereafter (for such duration) be
converted into Eurocurrency Loans), whereupon any request for a Eurocurrency
Borrowing or Alternative Currency Borrowing (in the affected currency or
currencies), as the case may be (or to convert an ABR Borrowing or a Borrowing
comprised of Foreign Base Rate Loans to a Eurocurrency Borrowing or to continue
a Eurocurrency Borrowing or an Alternative Currency Borrowing (in the affected
currency or currencies), as the case may be, for an additional Interest Period)
shall, as to such Lender only, be deemed a request for an ABR Loan (in the case
of Loans denominated in Dollars) or a Foreign Base Rate Loan (in the case of
Loans denominated in an Alternative Currency) (or a request to continue an ABR
Loan as such or to convert a Eurocurrency Loan into an ABR Loan or a Foreign
Base Rate Loan, as the case may be), unless such declaration shall be
subsequently withdrawn;
(ii) such Lender may require that all outstanding Eurocurrency
Loans or Alternative Currency Loans (in the affected currency or currencies), as
the case may be, made by it be converted to ABR Loans (in the case of
Eurocurrency Loans denominated in Dollars) or Foreign Base Rate Loans (in the
case of Loans denominated in an Alternative Currency), as the case may be, in
which event all such Eurocurrency Loans or Alternative Currency Loans (in the
affected currency or currencies), as the case may be, shall be automatically
converted to ABR Loans or Foreign Base Rate Loans, as the case may be, as of the
effective date of such notice as provided in paragraph (b) below; and
(iii) in the case of any such change affecting the Issuing
Bank's ability to issue, or any Revolving Credit Lender's ability to acquire
participations in, Letters of Credit denominated in an Alternative Currency, the
Issuing Bank or such Lender may declare that Letters of Credit will not
thereafter be issued in the affected Alternative Currency or Currencies,
whereupon the affected Alternative Currency or Currencies shall be deemed (for
the duration of such declaration) not to constitute an Alternative Currency for
purposes of the issuance of Letters of Credit.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurocurrency Loans or Alternative Currency Loans, as the case may be,
that would have been made by such Lender or the converted Eurocurrency Loans or
Alternative Currency Loans, as the case may be, of such Lender shall instead be
applied to repay the ABR Loans or Foreign Base Rate Loans, as the case may be,
made by such Lender in lieu of, or resulting from the conversion of, such
Eurocurrency Loans or Alternative Currency Loans, as the case may be.
(b) For purposes of this Section 2.15, a notice to the
Borrowers by any Lender shall be effective as to each Eurocurrency Loan made by
such Lender, on the last day of the Interest Period currently applicable to such
Eurocurrency Loan or within such earlier period required by law; in all other
cases such notice shall be effective on the date of receipt by the applicable
Borrower.
SECTION 2.16. Indemnity. Each Borrower agrees to indemnify,
severally and not jointly, each Lender against and to hold each Lender harmless
from any loss or expense (other than through such Lender's gross negligence or
willful misconduct) that such Lender may sustain or incur as a consequence of
(a) default by such Borrower in making a borrowing of, conversion into or
continuation of Eurocurrency Loans after such
42
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by such Borrower in making any
prepayment after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurocurrency
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Percentage included therein, if
any) over (ii) the amount of interest (as reasonably determined by such Lender)
that would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurocurrency
market. If any Lender becomes entitled to claim any amounts under the indemnity
contained in this Section 2.16, it shall provide prompt notice thereof to the
applicable Borrower, through the Administrative Agent, certifying (i) that one
of the events described in clause (a), (b) or (c) has occurred and describing in
reasonable detail the nature of such event, (ii) as to the loss or expense
sustained or incurred by such Lender as a consequence thereof and (iii) as to
the amount for which such Lender seeks indemnification hereunder and a
reasonably detailed explanation of the calculation thereof. Such a certificate
as to any indemnification pursuant to this Section 2.16 submitted by such
Lender, through the Administrative Agent, to the applicable Borrower shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
SECTION 2.17. Pro Rata Treatment. Except as provided below in
this Section 2.17 with respect to Swingline Loans and as required under Section
2.15, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit Commitments and
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). For purposes of determining the
available Revolving Credit Commitments of the Lenders at any time, each
outstanding Swingline Loan shall be deemed to have utilized the Revolving Credit
Commitments of the Lenders (including those Lenders which shall not have made
Swingline Loans) pro rata in accordance with such Revolving Credit Commitments.
Each Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole Dollar
(or comparable unit of any applicable Alternative Currency) amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against a Borrower or any other Loan Party, or pursuant to a
secured claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or by any other means, obtain payment (voluntary or involuntary)
in respect of any Loan or Loans or L/C Disbursement as a result of which the
unpaid principal portion of its Term Loans and Revolving Loans and
participations in
43
L/C Disbursements shall be proportionately less than the unpaid principal
portion of the Term Loans and Revolving Loans and participations in L/C
Disbursements of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Term Loans and
Revolving Loans and L/C Exposure, as the case may be of such other Lender, so
that the aggregate unpaid principal amount of the Term Loans and Revolving Loans
and L/C Exposure and participations in Term Loans and Revolving Loans and L/C
Exposure held by each Lender shall be in the same proportion to the aggregate
unpaid principal amount of all Term Loans and Revolving Loans and L/C Exposure
then outstanding as the principal amount of its Term Loans and Revolving Loans
and L/C Exposure prior to such exercise of banker's lien, setoff or counterclaim
or other event was to the principal amount of all Term Loans and Revolving Loans
and L/C Exposure outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.18 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. The
Borrowers and Parent expressly consent to the foregoing arrangements and agree
that any Lender holding a participation in a Term Loan or Revolving Loan or L/C
Disbursement deemed to have been so purchased may, to the extent provided in
Section 9.07, exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by Parent or such Borrower
to such Lender by reason thereof as fully as if such Lender had made a Loan
directly to the Borrowers in the amount of such participation.
SECTION 2.19. Payments. (a) Except as otherwise provided
herein, the applicable Borrower shall make each payment (including principal of
or interest on any Borrowing or any Fees or other amounts) hereunder and under
any other Loan Document not later than 1:00 p.m., New York City time or, in the
case of any payment in an Alternative Currency, 1:00 p.m., local time in the
country of the Alternative Currency), on the date when due in immediately
available funds, without setoff, defense or counterclaim. Each such payment
(other than (i) Issuing Bank Fees and amounts pursuant to Section 2.05(c)(iii),
which shall be paid directly to the Issuing Bank, and (ii) reimbursements of
drafts under Letters of Credit which shall be paid to the respective Issuing
Bank) shall be made to the Administrative Agent at its offices designated by the
Administrative Agent from time to time. Each such payment (other than principal
of and interest on Alternative Currency Loans which shall be made in the
applicable Alternative Currency) shall be made in Dollars. The Administrative
Agent shall distribute such funds to the Lenders, as the case may be, holding
obligations on account of which such amounts were paid promptly upon receipt in
like funds as received.
(b) Whenever any payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder or under any
other Loan Document shall become due, or otherwise would occur, on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Except to the extent required under
applicable law, all payments made by a Borrower or any Guarantor under this
Agreement or any Loan Document shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority excluding taxes measured
44
by or imposed upon the overall net income of the Administrative Agent or any
Lender or its applicable lending office, or any branch or affiliate of either,
and all franchise taxes, branch taxes, taxes on doing business or taxes measured
by or imposed upon the overall capital or net worth of the Administrative Agent
or any Lender or its applicable lending office, or any branch or affiliate of
either, in each case imposed: (i) by the jurisdiction under the laws of which
the Administrative Agent or such Lender, applicable lending office, branch or
affiliate is organized or is located, or in which the principal executive office
of the Administrative Agent or any Lender is located, or any nation within which
such jurisdiction is located or any political subdivision thereof; or (ii) by
reason of any connection between the jurisdiction imposing such tax and the
Administrative Agent or such Lender, applicable lending office, branch or
affiliate other than a connection arising from the Administrative Agent or such
Lender having executed, delivered or performed its obligations under, or
received payment under or enforced, this Agreement or any other Loan Document.
If any such non-excluded taxes, levies, imposts, duties, charges, fees
deductions or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder or
under any other Loan Document, the amounts so payable to the Administrative
Agent or such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement; provided, however, that the applicable
Borrower or Guarantor shall be entitled to deduct and withhold any Non-Excluded
Taxes and shall not be required to increase any such amounts payable to any
Lender or the Administrative Agent under the circumstances and to the extent set
forth in Section 2.20(b). Whenever any Non-Excluded Taxes are payable by a
Borrower, as promptly as possible thereafter such Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
such Borrower showing payment thereof. If a Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, such Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section 2.20(a) shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Notwithstanding the provisions of Section 2.20(a),
the applicable Borrower or Guarantor shall be entitled to deduct and withhold
Non-Excluded Taxes and shall not be required to increase any amounts payable to
a Lender or the Administrative Agent in respect of:
(i) Non-Excluded Taxes imposed by any Governmental Authority
of, or located in, Mexico, to the extent such Non-Excluded Taxes are imposed on
payments at a rate in excess of 4.9% (such Non-Excluded Taxes in excess of 4.9%,
"Excess Mexican Taxes"; provided, however, that if after the date hereof any tax
treaty to which Mexico is a party is amended, this clause 2.20(b)(i) shall not
apply to any Lender or the Administrative Agent to the extent such Lender or the
Administrative Agent, as the case may be, would not have been subject to such
Excess Mexican Taxes but for such amendment;
(ii) Non-Excluded Taxes that would not have been incurred but
for the failure of such Lender or the Administrative Agent, as the case may be,
or in the case of a participation pursuant to Section 9.05, the failure of the
relevant participant, to comply with any certification, identification,
information, documentation or other reporting
45
requirement, if compliance is required by law, regulation, administrative
practice or an applicable treaty as a precondition to exemption from, or
reduction in the rate of, Non-Excluded Taxes;
(iii) Non-Excluded Taxes imposed by the United States of
America, if such Lender or the Administrative Agent is not organized under the
laws of the United States of America or a state thereof and fails to comply with
requirements of Section 2.20(c); and
(iv) Non-Excluded Taxes imposed by any Governmental Authority
of, or located in, Mexico as a result of the failure by any Lender (x) to
provide to the Borrowers or any Guarantor, as the case may be, upon request of
the Borrowers or any Guarantor, as the case may be, and if and when required
under applicable law, a letter specifying that the Lender is the effective
beneficiary of the interest payments under this Agreement or any other Loan
Document, as set forth in the Mexican Income Tax Law (Ley del Impuesto Sobre la
Renta) and the "Miscellaneous Tax Resolution for 2003" (Resolucion Miscelanea
Fiscal para 2003, as amended, or any equivalent general rules in effect
thereafter while this Agreement shall remain in full force and effect, or (y) to
maintain registration with the Ministry of Finance and Public Credit as a
foreign financial institution for purposes of Section I of Article 195 of the
Mexican Income Tax Law, as long as such requirement is applicable to such
Lender, and to comply with the requirements set forth therein.
(c) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) on or before the date of any payment by a Borrower under
this Agreement or any other Loan Document to such Lender, deliver to the
Borrowers and the Administrative Agent two duly completed copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI, or successor applicable
form, as the case may be;
(ii) deliver to the Borrowers and the Administrative Agent two
further copies of any such form or certification on or before the date that any
such form or certification expires or becomes obsolete and after the occurrence
of any event requiring a change in the most recent form previously delivered by
it to the Borrowers; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the Borrowers or
the Administrative Agent;
unless in any such case, any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrowers and the Administrative Agent. Such Lender shall certify that it is
entitled to receive payments under this Agreement and the other Loan Documents
without deduction or withholding of any United States federal income taxes and
that it is entitled to an exemption from United States backup withholding tax.
Each Person that shall become a Lender or a participant pursuant to Section 9.05
shall, upon the effectiveness of the related transfer, be required to provide
all of the forms and statements required pursuant to this Section 2.20, provided
that in the case of a participant such participant shall furnish all such
required forms and statements to the Lender from which the related participation
shall have been purchased.
46
SECTION 2.21. Certain Rules Relating to the Payment of
Additional Amounts. (a) Upon the request, and at the expense, of a Borrower or
Guarantor, each Lender or the Administrative Agent to which such Borrower or
Guarantor is required to pay any additional amount pursuant to Section 2.14 or
2.20, and any participant of a Lender or the Administrative Agent in respect of
whose participation such payment is required, shall reasonably afford such
Borrower or Guarantor the opportunity to contest, and reasonably cooperate with
such Borrower or Guarantor in contesting, the imposition of any Non-Excluded Tax
giving rise to such payment, provided that (i) such Lender or the Administrative
Agent shall not be required to afford such Borrower or Guarantor the opportunity
to so contest unless the Borrower or Guarantor shall have confirmed in writing
to such Lender or the Administrative Agent its obligation to pay such amounts
pursuant to this Agreement and (ii) such Borrower or Guarantor shall reimburse
such Lender or the Administrative Agent for its reasonable attorneys' and
accountants' fees and disbursements incurred in so cooperating with such
Borrower or Guarantor in contesting the imposition of such Non-Excluded Tax.
(b) If a Lender or the Administrative Agent changes its
applicable lending office (other than pursuant to paragraph (c) below) and the
effect of the change, as of the date of the change, would be to cause a Borrower
or Guarantor to become obligated to pay any additional amount under Section 2.14
or 2.20, such Borrower or Guarantor shall not be obligated to pay such
additional amount.
(c) If a condition or an event occurs which would, or
would upon the passage of time or giving of notice, result in the payment of any
additional amount to any Lender or the Administrative Agent by a Borrower or
Guarantor pursuant to Section 2.14 or 2.20 such Lender or the Administrative
Agent shall take such steps as may reasonably be available to it and acceptable
to such Borrower or Guarantor to mitigate the effects of such condition or event
(which shall include efforts to rebook the Loans or reissue Letters of Credit
held by such Lender at another lending office, or through another branch or an
affiliate, of such Lender), provided that such Lender or the Administrative
Agent shall not be required to take any step that, in its reasonable judgment,
would be materially disadvantageous to its business or operations or would
require it to incur additional costs (unless such Borrower or Guarantor agrees
to reimburse such Lender or the Administrative Agent for the reasonable
incremental out-of-pocket costs thereof). If a condition or event occurs which
would, or would upon the passage of time or giving of notice, result in the
payment of any additional amount to any Lender or the Administrative Agent by a
Borrower or Guarantor pursuant to Section 2.14(a)(i) (i.e. increased costs for
taxes) such Lender or the Administrative Agent shall promptly notify such
Borrower or Guarantor and the Administrative Agent, provided that a failure on
the part of a Lender or the Administrative Agent to notify such Borrower or
Guarantor shall not result in any liability to such Lender or the Administrative
Agent and shall not reduce the amount of any additional amounts payable
hereunder to such Lender or the Administrative Agent to the extent that such
failure to notify such Borrower or Guarantor does not result in the payment of
any additional amount by such Borrower or Guarantor pursuant to Section
2.14(a)(i) which payment could have been avoided or reduced had the Lender or
the Administrative Agent notified the Borrower or Guarantor in accordance with
this Section 2.21(c).
(d) Except as provided in the next sentence, if a
Borrower or Guarantor shall become obligated to pay additional amounts pursuant
to Section 2.14 or 2.20 and any affected Lender shall not have promptly taken
steps necessary to avoid the need for payments under Section 2.14 or 2.20, such
Borrower or Guarantor shall have the right, for so long as such obligation
remains, (i) with the assistance of the Administrative
47
Agent, to seek one or more substitute Lenders reasonably satisfactory to the
Administrative Agent and such Borrower to purchase the affected Loan, in whole
or in part, at an aggregate price no less than such Loan's principal amount plus
accrued interest, and assume the affected obligations under this Agreement, or
(ii) to the extent that no Default or Event of Default under Section 6.12, 6.13
or 7.02(a) shall have occurred of which either Borrower has actual knowledge and
is then continuing, upon at least four Business Days irrevocable notice to the
Administrative Agent, to prepay the affected Loan, in whole or in part, subject
to Section 2.16 but otherwise without premium or penalty. If a Borrower or
Guarantor shall become obligated to pay additional amounts pursuant to Section
2.20 in respect of Non-Excluded Taxes imposed by Mexico, the rights of such
Borrower or Guarantor pursuant to the preceding sentence shall apply only in the
event such Non-Excluded Taxes are imposed at a rate in excess of 4.9%. In the
case of the substitution of a Lender, the Borrowers, the Administrative Agent,
the affected Lender, and any substitute Lender shall execute and deliver an
appropriately completed Assignment and Acceptance pursuant to Section 9.05 to
effect the assignment of rights to, and the assumption of obligations by, the
substitute Lender. In the case of a prepayment of an affected Loan, the amount
specified in the notice shall be due and payable on the date specified therein,
together with any accrued interest to such date on the amount prepaid. In the
case of each of the substitution of a Lender and of the prepayment of an
affected Loan, the applicable Borrower shall first pay the affected Lender any
additional amounts owing under Sections 2.14, 2.16 and 2.20 (as well as any
commitment fees and other amounts then due and owing to such Lender) prior to
such substitution or prepayment.
(e) If the Administrative Agent or any Lender receives a
refund in respect of taxes for which a Borrower or Guarantor has made additional
payments pursuant to Section 2.14(a) or 2.20(a), the Administrative Agent or
such Lender, as the case may be, shall promptly pay such refund (together with
any interest with respect thereto received from the relevant taxing authority)
to such Borrower or Guarantor; provided, however, that such Borrower and
Guarantor agrees promptly to return such refund (together with any interest with
respect thereto due to the relevant taxing authority) (free of all Non-Excluded
Taxes) to the Administrative Agent or the applicable Lender, as the case may be,
upon receipt of a notice that such refund is required to be repaid to the
relevant taxing authority. Notwithstanding anything to the contrary contained in
this Section 2.21(e), no Lender shall have any obligation to disclose to a
Borrower any of such Lender's books, records or tax filings.
(f) The obligations of the Administrative Agent and of
each Lender or participant of a Lender under this Section 2.21 shall survive the
termination of this Agreement and the payment of the Loans and all amounts
payable hereunder.
SECTION 2.22. Letters of Credit. (a) General. Either Borrower
may request the issuance of a Letter of Credit for its own or any of its
Subsidiaries' account, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time while the
Revolving Credit Commitments remain in effect. This Section 2.22 shall not be
construed to impose an obligation upon the Issuing Bank to issue any Letter of
Credit that is inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions. In order to request the issuance of a Letter of Credit (or
to amend, renew or extend an existing Letter of Credit), the applicable Borrower
shall deliver (including by telecopy) to the Issuing Bank and the Administrative
Agent (at least five Business Days
48
prior to the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), the amount of such Letter of
Credit, the currency in which such Letter of Credit is to be denominated (which
shall be Dollars or, subject to Section 2.15, an Alternative Currency), the name
and address of the beneficiary thereof and such other information as shall be
reasonably necessary to prepare such Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if, and upon issuance, amendment,
renewal or extension of each Letter of Credit the applicable Borrower shall be
deemed to represent and warrant that, after giving effect to such issuance,
amendment, renewal or extension (A) the L/C Exposure shall not exceed
$10,000,000, (B) the Aggregate Alternative Currency Revolving Credit Exposure
shall not exceed $20,000,000, (C) the Aggregate Revolving Credit Exposure shall
not exceed the Total Revolving Credit Commitment and (D) the DCJ Revolving
Credit Exposure shall not exceed the DCJ Maximum Percentage of the Total
Revolving Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire
at the close of business on the earlier of the date one year after the date of
the issuance of such Letter of Credit and the date that is three Business Days
prior to the Maturity Date, unless such Letter of Credit expires by its terms on
an earlier date; provided that any Letter of Credit may, upon the request of the
applicable Borrower, include a provision whereby such Letter of Credit shall be
renewed automatically for additional consecutive periods of 12 months or less
(but not beyond the date that is three Business Days prior to the Maturity Date)
unless the Issuing Bank notifies the beneficiary thereof at least 30 days prior
to the then-applicable expiration date that such Letter of Credit will not be
renewed.
(d) Participations. (i) The Issuing Bank irrevocably
agrees to grant and hereby grants to each Revolving Credit Lender, and, to
induce the Issuing Bank to issue Letters of Credit hereunder, each Revolving
Credit Lender irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Bank, on the terms and conditions hereinafter stated,
for such Revolving Credit Lender's own account and risk an undivided interest
equal to such Revolving Credit Lender's Pro Rata Percentage from time to time in
effect in the Issuing Bank's obligations and rights (other than with respect to
the Issuing Bank Fees and amounts pursuant to Section 2.05(c)(iii)) under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Bank thereunder. Each Revolving Credit Lender agrees with the Issuing
Bank to make the payments specified in clause (f) of Section 2.02 hereof.
(ii) Whenever, at any time after the Issuing Bank has made
payment under any Letter of Credit issued by it and has received from any
Revolving Credit Lender its pro rata share of such payment in accordance with
Section 2.02(f), the Issuing Bank receives any payment related to such Letter of
Credit (whether directly from a Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuing Bank), or any payment of interest on
account thereof, the Issuing Bank will, (x) if with respect to payments in
Dollars, if such payment is received prior to 12:00 noon, New York City time, on
a Business Day, distribute to such Revolving Credit Lender its pro rata share
thereof prior to the end of such Business Day and otherwise the Issuing Bank
will distribute such payment on the next succeeding Business Day and (y) if with
respect to an Alternative Currency, if such payment is received prior to 10:00
a.m., local time, on a Business Day, distribute to such Revolving Credit Lender
its pro rata share thereof prior to the end of such Business Day and otherwise
the Issuing Bank will distribute such payment on the next succeeding Business
Day; provided, however, that in the event that
49
any such payment received by the Issuing Bank and distributed to the Revolving
Credit Lenders shall be required to be returned by the Issuing Bank, each such
Revolving Credit Lender shall return to the Issuing Bank the portion thereof
previously distributed by the Issuing Bank to it.
(e) Reimbursement. (i) Upon payment of a draft under a
Letter of Credit, the applicable Borrower agrees to reimburse the Issuing Bank
on the same Business Day on which it receives notice that a draft presented
under any Letter of Credit issued by such Issuing Bank has been paid by such
Issuing Bank, provided such Issuing Bank provides such notice to the Borrower
prior to 11:00 a.m., New York City time, on such Business Day and otherwise the
Borrower will reimburse the Issuing Bank on the next succeeding Business Day by
11:00 a.m., New York City time (or, in the case of any payment in an Alternative
Currency, 11:00 a.m., local time in the country of the Alternative Currency);
provided further that the failure to provide such notice shall not affect the
applicable Borrower's absolute and unconditional obligation to reimburse the
Issuing Bank for any draft paid under any Letter of Credit issued by it. Any
such notice shall indicate the amount of (x) such draft so paid and (y) any
taxes, fees, charges or other costs or expenses reasonably incurred by the
Issuing Bank in connection with such payment. Each such payment shall be made to
the Issuing Bank at its address for notices specified herein in Dollars or in
the applicable Alternative Currency and in immediately available funds.
(ii) Each drawing under any Letter of Credit shall constitute
a request by the Borrower to the Administrative Agent for a borrowing pursuant
to Section 2.02 of ABR Loans in the amount of such drawing (or the Dollar
Equivalent thereof) but without any requirement for compliance with the prior
notice or minimum borrowing amount provisions of Section 2.02 or the conditions
set forth in Section 4.01. The date of Borrowing with respect to such borrowing
shall be the date of such drawing. Any such request or borrowing shall not
relieve the Issuing Bank or Revolving Credit Lender of any liability resulting
from the gross negligence or willful misconduct of the Issuing Bank or any
Revolving Credit Lender, or otherwise affect any defenses or other right that
either Borrower may have as a result of any such gross negligence or willful
misconduct.
(f) Obligations Absolute. (i) Each Borrower's obligation
to reimburse L/C Disbursements as provided in paragraph (e) above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which a Borrower
may have or have had against the Issuing Bank, any Lender or any beneficiary of
a Letter of Credit, provided that this paragraph shall not relieve the Issuing
Bank or any Lender of any liability resulting from the gross negligence or
willful misconduct of the Issuing Bank or any Lender, or otherwise affect any
defense or other right that a Borrower may have as a result of any such gross
negligence or willful misconduct.
(ii) Each Borrower also agrees with the Issuing Bank that the
Issuing Bank shall not be responsible for, and such Borrower's reimbursement
obligations under Section 2.22(e) shall not be affected by, among other things,
(x) the validity or genuineness of documents or of any endorsements thereon,
even though such documents shall in fact prove to be invalid, fraudulent or
forged, or (y) any dispute between or among such Borrower and any beneficiary of
any Letter of Credit or any other party to which such Letter of Credit may be
transferred or (z) any claims whatsoever of such Borrower against any
beneficiary of such Letter of Credit or any such transferee, provided that this
paragraph shall not relieve the Issuing Bank of any liability resulting
50
from the gross negligence or willful misconduct of the Issuing Bank, or
otherwise affect any defense or other right that such Borrower may have as a
result of any such gross negligence or willful misconduct.
(iii) Neither the Issuing Bank with respect to any Letter of
Credit nor any Lender with respect thereto shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with such Letter of
Credit, except for errors or omissions caused by such Person's gross negligence
or willful misconduct.
(iv) Each Borrower agrees that any action taken or omitted by
the Issuing Bank under or in connection with any Letter of Credit issued by it
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Commercial Code of the State of New York, shall be binding on such
Borrower and shall not result in any liability of such Issuing Bank or any
Lender to such Borrower.
(g) Disbursement Procedures. The Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Bank shall
as promptly as possible give telephonic notification, confirmed by telecopy, to
the Administrative Agent and the applicable Borrower of such demand for payment
and whether the Issuing Bank has made or will make an L/C Disbursement
thereunder, provided that any failure to give or delay in giving such notice
shall not relieve the applicable Borrower of its obligation to reimburse the
Issuing Bank and the Revolving Credit Lenders with respect to any such L/C
Disbursement; provided further that this paragraph shall not relieve the Issuing
Bank of any liability resulting from the gross negligence or willful misconduct
of the Issuing Bank, or otherwise affect any defense or other right that the
applicable Borrower may have as a result of any such gross negligence or willful
misconduct. The Administrative Agent shall promptly give each Revolving Credit
Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any
L/C Disbursement in respect of a Letter of Credit, then, unless the applicable
Borrower shall reimburse such L/C Disbursement in full as specified in clause
(e) above the unpaid amount thereof shall bear interest for the account of the
Issuing Bank, for each day from and including the date of such L/C Disbursement,
to but excluding the earlier of the date of payment by the Borrower or the date
on which interest shall commence to accrue thereon as provided in Section
2.02(f), at the rate per annum that would apply to such amount if such amount
were (i) in the case of an L/C Disbursement denominated in Dollars, an ABR Loan,
and (ii) in the case of an L/C Disbursement denominated in an Alternative
Currency, a Foreign Base Rate Loan.
(i) Resignation or Removal of the Issuing Bank. The
Issuing Bank may resign at any time by giving 180 days' prior written notice to
the Administrative Agent, the Lenders and the Borrowers, and may be removed at
any time by the Borrowers by notice to the Issuing Bank and the Administrative
Agent. Subject to the next succeeding paragraph, upon the acceptance of any
appointment as the Issuing Bank hereunder by a Lender that shall agree to serve
as successor Issuing Bank, such successor shall succeed to and become vested
with all the interests, rights and obligations of the retiring Issuing Bank and
the retiring Issuing Bank shall be discharged from its obligations to issue
additional Letters of Credit hereunder. At the time such removal or resignation
shall become effective, the Borrowers shall pay all accrued and unpaid fees
pursuant to Section 2.05(c)(ii). The acceptance of any appointment as the
Issuing Bank
51
hereunder by a successor Lender shall be evidenced by an agreement entered into
by such successor, in a form satisfactory to the Borrowers and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Issuing Bank under this Agreement and the other Loan Documents and (ii)
references herein and in the other Loan Documents to the term "Issuing Bank"
shall be deemed to refer to such successor or to any previous Issuing Bank, or
to such successor and all previous Issuing Banks, as the context shall require.
After the resignation or removal of the Issuing Bank hereunder, the retiring
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement and the other
Loan Documents with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters of
Credit.
(j) Reporting Requirements of Issuing Banks. (a) Within
two Business Days following the last day of each calendar month, each Issuing
Bank shall deliver to the Administrative Agent a report detailing all activity
during the preceding month with respect to any Letters of Credit issued by such
Issuing Bank, including the face amount, the account party, the beneficiary and
the expiration date of such Letters of Credit and any other information with
respect thereto as may be requested by the Administrative Agent.
(k) Additional Issuing Banks. The Borrowers may, at any
time and from time to time with the consent of the Administrative Agent (which
consent shall not be unreasonably withheld) and such Lender, designate one or
more additional Lenders to act as an issuing bank under the terms of this
Agreement. Any Lender designated as an issuing bank pursuant to this paragraph
(k) shall be deemed to be an "Issuing Bank" (in addition to being a Lender) in
respect of Letters of Credit issued or to be issued by such Lender, and, with
respect to such Letters of Credit, such term shall thereafter apply to the other
Issuing Bank or Issuing Banks and such Lender.
SECTION 2.23. Swingline Loans. (a) Swingline Commitment.
Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, the Swingline Lender agrees to make loans, in
Dollars, to either Borrower at any time and from time to time on and after the
Closing Date and until the earlier of the Maturity Date and the termination of
the Revolving Credit Commitments in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of all Swingline Loans exceeding $7,500,000 in
the aggregate or (ii) the Aggregate Revolving Credit Exposure, after giving
effect to any Swingline Loan, exceeding the Total Revolving Credit Commitment.
Each Swingline Loan shall be in a minimum amount of $250,000 or a multiple of
$100,000 in excess thereof. The Swingline Commitments may be terminated or
reduced from time to time as provided herein. Within the foregoing limits, each
Borrower may borrow, pay or prepay and reborrow Swingline Loans hereunder,
subject to the terms, conditions and limitations set forth herein.
(b) Swingline Loans. The applicable Borrower shall notify
the Administrative Agent and the Swingline Lender, by telecopy, or by telephone
(confirmed by telecopy), not later than 2:00 p.m., New York City time, on the
day of a proposed Swingline Loan. Such notice shall be delivered on a Business
Day, shall be irrevocable and shall refer to this Agreement and shall specify
the requested date (which shall be a Business Day), the account of the
applicable Borrower into which the Swingline Loan is to be deposited and the
amount of such Swingline Loan. The Swingline Lender will make the proceeds of
the Swingline Loan available to the Administrative Agent for
52
further credit on the date of such notice to the account so designated by the
applicable Borrower.
(c) Prepayment. Each Borrower shall have the right at any
time and from time to time to prepay any Swingline Loan, in whole or in part,
upon giving written or telecopy notice (or telephone notice promptly confirmed
by written, or telecopy notice) to the Swingline Lender and the Administrative
Agent before 1:00 p.m., New York City time, on the date of prepayment at the
Swingline Lender's address for notices specified on Schedule 2.01 or as
otherwise specified in writing to the applicable Borrower. All principal
payments of Swingline Loans shall be accompanied by accrued interest on the
principal amount being repaid to the date of payment.
(d) Interest. Each Swingline Loan shall be an ABR Loan
and, subject to the provisions of Section 2.07, shall bear interest as provided
in Section 2.06(a).
(e) Participations. (i) The Administrative Agent, at any
time in its sole and absolute discretion, may (or, upon the request of the
Swingline Lender, shall), on behalf of the applicable Borrower (which hereby
irrevocably directs the Administrative Agent to act on its behalf) request that
each Revolving Credit Lender make a Revolving Credit Loan in an amount equal to
such Revolving Credit Lender's Pro Rata Percentage of the then outstanding
principal amount of Swing Line Loans (the "Refunded Swing Line Loans") on the
date such notice is given (regardless of whether the Refunded Swing Line Loans
comply with the minimum borrowing provisions of Section 2.02). In the event that
the Swingline Lender makes its request for refunding of the Swingline Loans,
each Revolving Credit Lender shall make the proceeds of its Revolving Loan
available in immediately available funds to the Administrative Agent, for the
benefit of the Swingline Lender, at the office of the Administrative Agent prior
to 11:00 a.m., New York City time, on the first Business Day following such
request (or, if such request is made prior to 10:00 a.m., New York City time, on
any date, then the proceeds of such Revolving Loans shall instead be so made
available to the Administrative Agent prior to 2:00 p.m., New York City time, on
the date of such request), provided that in the event that any of the events
described in Section 7.01(a) or (b) shall have occurred and be continuing, the
Revolving Credit Lenders shall not make such Revolving Loans and the provisions
of clause (ii) below shall apply.
(ii) If, prior to the making of a Revolving Loan pursuant to
clause (i) above, one of the events described in Section 7.01(a) or (b) shall
have occurred and be continuing, each Revolving Credit Lender will, on the date
such Revolving Loan was to have been made, purchase from the Swingline Lender an
undivided participating interest in the Swingline Loan to be refunded in an
amount equal to its Pro Rata Percentage of such Swingline Loan to be refunded.
Each Revolving Credit Lender will immediately transfer to the Administrative
Agent, in immediately available funds, the amount of its participation.
(iii) Whenever, at any time after the Swingline Lender has
received from any Revolving Credit Lender such Lender's participating interest
in a Swingline Loan to be refunded pursuant to clause (ii), the Swingline Lender
receives any payment on account thereof, the Swingline Lender will pay to the
Administrative Agent for distribution to such Revolving Credit Lender its
participating interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Revolving
Credit Lender's participating interest was outstanding and funded) in like funds
as received, provided that in the event that such payment received by the
Swingline Lender is required to be returned, such Revolving Credit Lender will
53
return to the Swingline Lender any portion thereof previously distributed by the
Swingline Lender through the Administrative Agent to it in like funds as such
payment is required to be returned by the Swingline Lender.
(f) Unconditional Obligation to Refund Swingline Loans.
Each Revolving Credit Lender's obligation to make Revolving Loans and to
purchase participating interests in accordance with Sections 2.23(e)(i) and (ii)
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Revolving Credit Lender may have
against the Swingline Lender, either Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of any Default or Event of
Default; (iii) any adverse change in the condition (financial or otherwise) of
the applicable Borrower or any other Person; (iv) any breach of this Agreement
by the Borrower or any other Person; (v) any inability of the applicable
Borrower to satisfy the conditions precedent to borrowing set forth in this
Agreement on the date upon which such Revolving Loan is to be made or
participating interest is to be purchased; or (vi) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
If any Revolving Credit Lender does not make available to the Administrative
Agent the amount required pursuant to Sections 2.23(e)(i) and (ii), as the case
may be, the Administrative Agent shall be entitled to recover such amount on
demand from such Revolving Credit Lender, together with interest thereon for
each day from the date of non-payment until such amount is paid in full at the
rate applicable to ABR Loans.
SECTION 2.24. Consistent Tax Treatment. Each Borrower and each
Lender hereby agrees to treat the Loans to JCI as Indebtedness of JCI and the
Loans of DCJ as Indebtedness of DCJ for all U.S. federal, state and local tax
purposes and for all non-U.S. tax purposes.
ARTICLE III
Representations and Warranties
Each of Parent and each Borrower hereby represents and
warrants as to itself and its Subsidiaries to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each Lender that:
SECTION 3.01. Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of Parent as at December 31, 2002 (including the
notes thereto) and the unaudited pro forma consolidated income statement for the
fiscal year ended December 31, 2002 (including the notes thereto) (collectively,
the "Pro Forma Financial Statements"), copies of which have heretofore been
furnished to each Lender, has been prepared giving effect to the Transactions.
The Pro Forma Financial Statements have been prepared based on the good faith
assumptions of Parent as of the date of delivery thereof and, based on such
assumptions, present fairly in all material respects on a pro forma basis the
estimated financial position of Parent and the Subsidiaries as at December 31,
2002, assuming that the events specified in the preceding sentence had actually
occurred at such date.
(b) The audited consolidated balance sheet of Lux S.A. as
at December 31, 2002, and the related consolidated statements of income and of
cash flows for the fiscal year ended on such date, reported on by and
accompanied by an unqualified report from Ernst & Young LLP, present fairly, in
all material respects, the consolidated
54
financial condition of Lux S.A. as at such date, and the consolidated results of
its operations and its consolidated cash flows for the fiscal year then ended.
The unaudited consolidated balance sheet of Lux S.A. as at March 31, 2003, and
the related unaudited consolidated statements of income and cash flows for the
three-month period ended on such date, on the basis disclosed in the footnotes
to such financial statements, present fairly, in all material respects, the
consolidated financial condition of Lux S.A. as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
three-month period then ended (subject to the omission of certain footnotes and
normal year-end audit and other adjustments). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by a Responsible Officer, and disclosed in any such
schedules and notes, and except that such unaudited financial statements do not
contain certain footnotes). All material Guarantees, material contingent
liabilities and liabilities for taxes, or all material long-term leases or
unusual forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, which according to GAAP must be reflected in such financial
statements or the notes thereto are so reflected. During the period from March
31, 2003, to and including the date hereof, there has been no disposition by Lux
S.A. of any business or property that would be material to Lux S.A., taken as a
whole, other than any such disposition which is reflected in the foregoing
financial statements or in the notes thereto, or which has otherwise been
disclosed in writing to the Lenders on or prior to the Closing Date, or which is
pursuant to the Transactions.
SECTION 3.02. Change. Since December 31, 2002, there has been
no development or event relating to or affecting any Loan Party which has had or
would reasonably be expected to have a Material Adverse Effect (after giving
effect to the Transactions and the transactions related thereto).
SECTION 3.03. Corporate Existence; Compliance with Law.
Parent, each Borrower and each of the Active Subsidiaries (a) is duly organized,
validly existing and, with respect to any such entity organized under the laws
of a jurisdiction of the United States of America, in good standing under the
laws of the jurisdiction of its organization, (b) has the corporate or other
organizational power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, except to the extent that the failure
to have such legal right would not be reasonably expected to have a Material
Adverse Effect, (c) is duly qualified as a foreign entity and, if applicable, in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and, if applicable, in good standing would not be reasonably expected
to have a Material Adverse Effect and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith would not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.04. Corporate Power; Authorization; Enforceable
Obligations. (a) Each of Parent, each Borrower and each other Loan Party has the
corporate or other organizational power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of each Borrower, to borrow hereunder, and has taken all necessary
corporate or other organizational action to authorize, in the case of each
Borrower, the Borrowings on the terms and conditions of this Agreement and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization
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of, filing with, notice to or other similar act by or in respect of, any
Governmental Authority or any other Person is required to be obtained or made by
or on behalf of any Loan Party or any other Subsidiary of Parent in connection
with the borrowings hereunder or with the execution, delivery, performance,
validity or enforceability of the Loan Documents to which Parent, the Borrowers
and each other Loan Party is a party, except for (i) consents, authorizations,
notices and filings described in Schedule 3.04(a), all of which have been
obtained or made or have the status described therein, (ii) filings to perfect
the Liens created by the Security Documents, (iii) filings pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3737 et seq.),
in respect of Accounts of the Borrowers and their Subsidiaries the obligor in
respect of which is the United States of America or any department, agency or
instrumentality thereof, (iv) recordation of the Mortgages and (v) consents,
authorizations, notices and filings which the failure to obtain or make would
not reasonably be expected to have a Material Adverse Effect.
(b) This Agreement has been, and each of the other Loan
Documents and any other agreement to be entered into by any Loan Party pursuant
hereto will be, duly executed and delivered on behalf of such Loan Party that is
party thereto. This Agreement constitutes, and each of the other Loan Documents
and any other agreement to be entered into by any Loan Party pursuant hereto
will constitute upon execution and delivery, the legal, valid and binding
obligation of such Loan Party, enforceable against such Loan Party in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
concurso mercantil, fraudulent conveyance, reorganization, moratorium, or
similar laws relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
SECTION 3.05. No Legal Bar. The execution, delivery and
performance of each Loan Document by each Loan Party party thereto, the
incurrence or issuance of and use of the proceeds of the Loans and of drawings
under the Letters of Credit by the Borrowers and the consummation on the Closing
Date of the other Transactions (a) will not violate any Requirement of Law or
result in a breach of any Contractual Obligation applicable to or binding upon
either Borrower, any Subsidiary or any of their respective properties or assets
in any respect that would reasonably be expected to have a Material Adverse
Effect and (b) will not result in the creation or imposition of any Lien on any
of their properties or assets pursuant to any Requirement of Law applicable to
it, as the case may be, or any of its Contractual Obligations, except for the
Liens arising under the Security Documents or permitted under Section 6.02.
SECTION 3.06. No Material Litigation. Except as disclosed on
Schedule 3.06, no litigation by, investigation by, or proceeding of or before
any arbitrator or any Governmental Authority is pending or, to the knowledge of
Parent or either Borrower, threatened by or against Parent or either Borrower or
any Subsidiary, or against any of its or their respective properties or revenues
(including after giving effect to the Transactions), which (a) is so pending or
threatened at any time on or prior to the Closing Date and relates to any Loan
Document or the other transactions contemplated hereby or (b) would reasonably
be expected to have a Material Adverse Effect.
SECTION 3.07. No Default. None of Parent, either Borrower or
any of the Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which would reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
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SECTION 3.08. Intellectual Property. Parent and each of the
Subsidiaries owns, or has the legal right to use, all United States patents,
trademarks, trade names, copyrights, technology, know-how and processes
necessary for the conduct of its business substantially as currently conducted
(the "Intellectual Property"), except for those the failure to own or have such
legal right to use which would not reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 3.08, no claim has been asserted
and is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does Parent or any Subsidiary know of any such claim and, to the
knowledge of Parent and the Subsidiaries, the use of such Intellectual Property
by Parent and the Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements that, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
SECTION 3.09. No Burdensome Restrictions; Compliance with
Laws. (a) Except as previously disclosed to the Lenders in writing prior to the
Closing Date, no Requirement of Law applicable to or Contractual Obligation of
Parent, either Borrower or any Subsidiary would reasonably be expected to have a
Material Adverse Effect.
(b) Certificates of occupancy and permits are in effect
for each Mortgaged Property as currently constructed, except to the extent that
any such failure to be in effect would reasonably be expected to have a Material
Adverse Effect.
(c) No exchange control law or regulation materially
restricts any Loan Party from complying with its obligations in respect of any
Alternative Currency Loan or Letter of Credit denominated in an Alternative
Currency.
SECTION 3.10. Taxes. Each of Parent and each of its
Subsidiaries has filed or caused to be filed all United States Federal income
tax returns and all other material tax returns which, to the knowledge of Parent
and each Borrower, are required to be filed and has paid all taxes shown to be
due and payable on said returns or on any assessments made against it or any of
its property and all other taxes, fees or other charges imposed on it or any of
its property by any Governmental Authority (other than any (i) taxes, fees or
other charges with respect to which the failure to pay, in the aggregate, would
not have a Material Adverse Effect or (ii) taxes, fees or other charges the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Parent, such Borrower or such
Subsidiary, as the case may be); other than as disclosed on Schedule 3.10, no
tax Lien has been filed, and, to the knowledge of Parent or either Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.
SECTION 3.11. Federal Regulations. No part of the proceeds of
any Loans will be used for "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U. If
requested by any Lender or the Administrative Agent, each Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form U-1 referred to in Regulation U.
SECTION 3.12. Employee Benefit Plans. During the five-year
period prior to each date as of which this representation is made, or deemed
made, with respect to any Plan (or, with respect to (vi), (viii) or (xi) below,
as of the date such representation is made or deemed made), none of the
following events or conditions, either individually
57
or in the aggregate, has resulted or is reasonably likely to result in a
liability to JCI or any of its Subsidiaries which would be reasonably expected
to have a Material Adverse Effect; (i) a Reportable Event; (ii) an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA); (iii) any material noncompliance with the applicable provisions
of ERISA or the Code; (iv) a termination of a Single Employer Plan (other than a
standard termination pursuant to Section 4041(b) of ERISA); (v) a Lien in favor
of the PBGC or a Plan; (vi) Underfunding with respect to any Single Employer
Plan; (vii) a complete or partial withdrawal from any Multiemployer Plan by JCI
or any Commonly Controlled Entity; (viii) any liability of JCI or any Commonly
Controlled Entity under ERISA if JCI or any such Commonly Controlled Entity were
to withdraw completely from all Multiemployer Plans as of the annual valuation
date most closely preceding the date on which this representation is made or
deemed made; (ix) the Reorganization or Insolvency of any Multiemployer Plan;
(x) an event or condition with respect to which JCI or any Commonly Controlled
Entity has incurred or could incur any liability in respect of a Former Plan;
and (xi) with respect to any Foreign Benefit Plan, any material noncompliance
with applicable foreign law or the incurrence of any material liability.
SECTION 3.13. Investment Company Act; Other Regulations. None
of Parent, either Borrower or any Subsidiary is an "investment company" required
to register as such under the Investment Company Act of 1940, as amended, within
the meaning of such Act. None of Parent, either Borrower or any Subsidiary is
subject to regulation under any federal or state statute or regulation (other
than Regulation X) which limits its ability to incur Indebtedness.
SECTION 3.14. Subsidiaries. On the Closing Date, the
Subsidiaries and their jurisdiction of incorporation shall be as set forth on
Schedule 3.14.
SECTION 3.15. Environmental Matters. Other than exceptions to
any of the following that would not, individually or in the aggregate,
reasonably be expected to result in the payment of a Material Environmental
Amount:
(a) the facilities and properties owned, leased or
operated by Parent, either Borrower or any Subsidiary (the "Properties") do not
contain any Materials of Environmental Concern in amounts or concentrations
which (i) constitute a violation of, or (ii) would reasonably be expected to
give rise to liability on the part of Parent, either Borrower or any Subsidiary
under, any applicable Environmental Law;
(b) the Properties and all operations at the Properties
are in compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any applicable
Environmental Law with respect to the Properties or the business operated by
Parent, either Borrower or any Subsidiary (the "Business") which would
materially interfere with the continued operation of the Properties;
(c) none of Parent, either Borrower or any Subsidiary has
received any written notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or compliance
with applicable Environmental Laws with regard to any of the Properties or the
Business, and none of Parent or either Borrower has knowledge or reason to
believe that any such notice will be received or is being threatened;
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(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties, in violation of, or in a manner
or to a location which would reasonably be expected to give rise to liability on
the part of Parent, either Borrower or any Subsidiary under, any applicable
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Properties,
in violation of, or in a manner that would reasonably be expected to give rise
to liability on the part of Parent, either Borrower or any Subsidiary under, any
applicable Environmental Law;
(e) no judicial proceeding or governmental or
administrative action is pending or, to the knowledge of Parent or either
Borrower, threatened, under any applicable Environmental Law to which Parent,
either Borrower or any Subsidiary is or will be named as a party with respect to
the Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any applicable
Environmental Law with respect to the Properties or the Business;
(f) there has been no Release or threatened Release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of Parent, either Borrower or any Subsidiary in
connection with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that would reasonably be expected to
give rise to liability on the part of Parent, either Borrower or any Subsidiary
under applicable Environmental Laws; and
(g) none of Parent, either Borrower or any Subsidiary has
assumed or retained, by contract or operation of law, any known or suspected
liabilities of any kind, fixed or contingent, as a result of any violation or
breach of applicable Environmental Law or with respect to any contamination by
any Materials of Environmental Concern.
SECTION 3.16. Accuracy and Completeness of Information. The
factual statements contained in the financial statements referred to in Sections
3.01(a) and (b), the Loan Documents (including the schedules thereto, but
excluding any statements by the Administrative Agent or any Lender) and any
other certificate or document furnished by or on behalf of Parent, either
Borrower or any Subsidiary to the Administrative Agent or the Lenders from time
to time in connection with this Agreement, taken as a whole, did not, as of the
Closing Date, to the best knowledge of the Parent and the Borrowers, contain any
material misstatement of fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances
under which the same were made, not materially misleading in their presentation
of the Transactions or the other transactions contemplated hereby or by the
other Transaction Documents or of Parent and the Subsidiaries taken as a whole;
all except as otherwise qualified herein or therein. It is understood that no
representation or warranty is made concerning any forecasts, estimates, pro
forma information, projections and statements as to anticipated future
performance or conditions, and the assumptions on which they were based,
contained in any such financial statements, certificates or documents except
that, as of the date such forecasts, estimates, pro forma information,
projections and statements were generated, (i) such forecasts, estimates, pro
forma information, projections and statements were based on the good faith
assumptions of the management of Parent or either Borrower and (ii) such
assumptions were believed by such management to be reasonable. Such forecasts,
estimates, pro forma information, projections and statements, and the
assumptions on which they were based, may or may not prove to be correct.
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SECTION 3.17. Solvency. As of the Closing Date, immediately
prior to and after giving effect to the Transactions and the incurrence of all
Indebtedness and obligations being incurred in connection herewith and
therewith, each Loan Party will be Solvent.
SECTION 3.18. Senior Indebtedness. The monetary obligations of
the Loan Parties under this Agreement and the other Loan Documents constitute
"Senior Indebtedness" of such Person under and as defined in the New Note
Documents.
SECTION 3.19. Title to Properties; Possession Under Leases.
(a) Each Borrower and each of the Subsidiaries of either Borrower, as the case
may be, has good and marketable title to, or valid leasehold interests in, all
its material real properties (including all Mortgaged Property), except for
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended purposes
(except with respect to those properties of the Borrowers and their Subsidiaries
which will be retitled after the Closing Date in connection with the
Transactions) and, upon transfer of title pursuant to the Mexican Security
Agreement, those properties which are subject to the Mexican Security Agreement.
All such properties are free and clear of Liens, other than Liens expressly
permitted by Section 6.02.
(b) None of Parent nor any Borrower has received any
written notice of any pending condemnation proceeding affecting the Mortgaged
Properties or any sale or disposition thereof in lieu of condemnation.
(c) None of Parent, either Borrower or any of the
Subsidiaries is obligated under any right of first refusal, option or other
contractual right to sell, assign or otherwise dispose of any Mortgaged Property
or any interest therein.
SECTION 3.20. U.S. Security Documents. Except with respect to
(a) Liens on equipment constituting fixtures, (b) any reserved rights of the
United States government as required under law, (c) Liens upon Patents, Patent
Licenses, Trademarks and Trademark Licenses (as such terms are defined in the
U.S. Security Agreement) to the extent that (i) such Liens cannot be perfected
by the filing of financing statements under the Uniform Commercial Code or by
the filing and acceptance thereof in the United States Patent and Trademark
Office or (ii) such Patents, Patent Licenses, Trademarks and Trademark Licenses
are not, individually or in the aggregate, material to the business of Parent,
the Borrowers and the Subsidiaries taken as a whole, (d) Liens on deposit
accounts, electronic chattel paper and letter-of-credit rights, (e) Collateral
the perfection of which requires filings in or other actions under the laws of
jurisdictions outside of the United States of America, any state, territory or
dependency thereof, Puerto Rico or the District of Columbia (except to the
extent that such filings or other actions have been made or taken), (f) Liens on
contracts or Accounts (as such term is defined in the U.S. Security Agreement)
on which the United States of America or any department, agency, or
instrumentality thereof is the obligor, (g) Liens on proceeds of Accounts and
Inventory which proceeds do not themselves constitute Collateral (as such terms
are defined in the U.S. Security Agreement), until transferred to or deposited
in the Collateral Proceeds Account (as such term is defined in the U.S. Security
Agreement) (if any), and (h) claims of creditors of Persons receiving goods
included as Collateral for "sale or return" within the meaning of Section 2-326
of the Uniform Commercial Code of the applicable jurisdiction, upon filing of
the financing statements delivered to the Administrative Agent by Parent, the
Borrowers and the Subsidiaries in the jurisdictions listed on Schedule 3.20
(which financing statements are in proper form for filing in such
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jurisdictions) and the recording of the Mortgages (and the recording of the U.S.
Security Agreement, and the making of filings after the Closing Date in any
other jurisdiction as may be necessary under any Requirement of Law) and the
delivery to, and continuing possession by, the Administrative Agent of all
Instruments, Chattel Paper and Documents (as such terms are defined in the U.S.
Security Agreement) a security interest in which is perfected by possession, the
Liens created pursuant to each U.S. Security Document, when executed and
delivered, will constitute valid Liens on and, to the extent provided therein,
perfected security interests in the collateral referred to in such U.S. Security
Document (but as to the Copyrights and the Copyright Licenses (as defined in the
U.S. Security Agreement) and accounts arising therefrom, only to the extent the
Uniform Commercial Code of the relevant jurisdiction, from time to time in
effect, is applicable) in favor of the Collateral Agent for the benefit of the
Lenders, which Liens will be prior to all other Liens of all other Persons,
except for Liens permitted pursuant to the Loan Documents (including those
permitted to exist pursuant to Section 6.02), enforceable as such as against all
other Persons (except, with respect to goods only, buyers in the ordinary course
of business and licensees in the ordinary course of business to the extent
provided in Section 9-320 or Section 9-321, as applicable, of the Uniform
Commercial Code as from time to time in effect in the applicable jurisdiction
and except to the extent that recording of an assignment or other transfer of
title to the Administrative Agent in the United States Patent and Trademark
Office or the United States Copyright Office may be necessary for such
enforceability), except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
Notwithstanding any other provision of this Agreement, capitalized terms which
are used in this Section 3.20 and not defined in this Agreement are so used as
defined in the applicable U.S. Security Document.
SECTION 3.21. Mexican Security Documents. Mexican Security
Documents. Upon (a) (i) execution and delivery of the Mexican Pledge Agreement
by the parties thereto, (ii) delivery to the Collateral Agent of the original
stock certificates representing the Pledged Shares (as such term is defined in
the Mexican Pledge Agreement), duly endorsed "in pledge" (en prenda) in favor of
the Collateral Agent for the benefit of the Secured Parties, and (iii)
registration of the pledge created over the Pledged Shares in the stock registry
book (libro de registro de acciones) of the relevant issuer of such Pledged
Shares, the Liens created pursuant to the Mexican Pledge Agreement will
constitute valid Liens on and, to the extent provided therein, perfected
security interests in the Pledged Shares referred to in the Mexican Pledge
Agreement in favor of the Collateral Agent for the benefit of the Secured
Parties, which Liens will be prior to all other Liens of all other Persons,
except for Liens permitted pursuant to the Loan Documents (including those
permitted to exist pursuant to Section 6.02), enforceable as such as against all
other Persons, except as enforceability may be limited by applicable bankruptcy,
insolvency, concurso mercantil, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law); and (b) (i) execution and delivery, before the presence of a Mexican
notary public, of the Mexican Security Agreement by the parties thereto; (ii)
the registration of the Mexican Security Agreement with the corresponding public
registries of property and commerce and satisfaction of all other requirements
set forth therein, the Trustee will hold, free and clear of any Liens (except
for Liens permitted pursuant to the Loan Documents (including those permitted to
exist pursuant to Section 6.02)) such title to the Trust Estate (as defined in
the Mexican Security Agreement) as has been conveyed to it by the trustors under
the Mexican Security Agreement, for the benefit of the Secured Parties, and the
61
Mexican Security Agreement, and such transfer of title to the Trustee will be
enforceable as such as against all other Persons, except as enforceability may
be limited by applicable bankruptcy, insolvency, concurso mercantil,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). Notwithstanding any
other provision of this Agreement, capitalized terms which are used in this
Section 3.21 and not defined in this Agreement are so used as defined in the
applicable Mexican Security Document.
SECTION 3.22. Location of Real Property and Leased Premises.
(a) To the knowledge of the Parent and the Borrowers, Schedule 3.22(a) lists
completely and correctly as of the Closing Date all real property owned by the
Borrowers and the Subsidiaries and the addresses thereof.
(b) To the knowledge of the Parent and the Borrowers,
Schedule 3.22(b) lists completely and correctly as of the Closing Date all real
property leased by the Borrowers and the Subsidiaries and the addresses thereof.
SECTION 3.23. Labor Matters. As of the Closing Date, there are
no strikes, lockouts or slowdowns against Parent, either Borrower or any
Subsidiary pending or, to the knowledge of Parent or the Borrowers, reasonably
expected to be commenced against Parent, either Borrower or any Subsidiary
which, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect. The hours worked by and payments made to employees of
Parent, the Borrowers and the Subsidiaries have not been in violation of any
applicable federal, state, local or foreign law dealing with such matters,
except where such violations would not reasonably be expected to have a Material
Adverse Effect. The consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which Parent, either Borrower or any
Subsidiary is bound.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of the
Issuing Bank to issue, amend, renew or extend Letters of Credit hereunder are
subject to the satisfaction of the following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing
or the making of a Swingline Loan, and on the date of each issuance, amendment,
renewal or extension of a Letter of Credit (each such event being called a
"Credit Event"):
(a) The Administrative Agent shall have received a notice
of such Borrowing as required by Section 2.03 (or such notice shall have been
deemed given in accordance with Section 2.02(f), 2.03 and 2.23) or, in the case
of the issuance, amendment, renewal or extension of a Letter of Credit, the
Issuing Bank and the Administrative Agent shall have received a notice
requesting the issuance, amendment, renewal or extension of such Letter of
Credit as required by Section 2.22(b) or, in the case of the Borrowing of a
Swingline Loan, the Swingline Lender and the Administrative Agent shall have
received a notice requesting such Swingline Loan as required by Section 2.23(b).
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(b) The representations and warranties set forth in
Article III hereof shall be true and correct in all material respects on and as
of the date of such Credit Event with the same effect as though made on and as
of such date, except to the extent such representations and warranties relate to
an earlier date.
(c) No Event of Default or Default shall have occurred
and be continuing.
Each Credit Event shall be deemed to constitute a
representation and warranty by the applicable Borrower and Parent on the date of
such Credit Event as to the matters specified in paragraphs (b) and (c) of this
Section 4.01.
SECTION 4.02. First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on
behalf of itself and the Lenders, a favorable written opinion of each of (i)
Debevoise & Xxxxxxxx, New York counsel for Parent and its Subsidiaries,
substantially to the effect set forth in Exhibit O-1, (ii) Xxxxx, Xxxxxxx x
Xxxxxxx, S.C., Mexican counsel for DCJ, JCSA and their respective subsidiaries,
substantially to the effect set forth in Exhibit O-2, (iii) Bonn & Xxxxxxx,
Luxembourg counsel for Parent, substantially to the effect set forth in Exhibit
O-3, (iv) Loyens & Loeff, Dutch counsel for Parent and its Subsidiaries,
substantially to the effect set forth in Exhibit O-4, (v) Xxxxxxxx, Xxxxxx &
Finger, special Delaware counsel for Parent and its subsidiaries, substantially
to the effect set forth in Exhibit O-5 and (vi) each local counsel listed on
Schedule 4.02(a), substantially to the effect set forth in Exhibit O-6, in each
case (A) dated the Closing Date, (B) addressed to the Administrative Agent, the
Collateral Agent, the Lead Arrangers and the Lenders, and (C) covering such
other matters relating to the Loan Documents and the other transactions
contemplated hereby as the Administrative Agent shall reasonably request, and
Parent and the Borrowers hereby request such counsel to deliver such opinions.
(b) The Administrative Agent shall have received (i) a
copy of the certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified, if available, as of a recent date by the
Secretary of State or other Governmental Authority of the state or other
jurisdiction of its organization, and, if applicable, a certificate as to the
good standing of each Loan Party as of a recent date, from such Secretary of
State or other Governmental Authority; (ii) a certificate of the Secretary,
Assistant Secretary or officer or director, as the case may be, of each Loan
Party dated the Closing Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws, if any, of such Loan Party as in effect on the
Closing Date and at all times since a date prior to the date of the resolutions
described in clause (B) below, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors (or other corporate
or comparable body, as appropriate) of such Loan Party authorizing the
execution, delivery and performance of the Loan Documents to which such Person
is a party and, in the case of the Borrowers, the borrowings hereunder, and that
such resolutions have not been modified, rescinded or amended and are in full
force and effect, (C) that the certificate or articles of incorporation of such
Loan Party delivered have not been amended and (D) as to the incumbency and
specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party; (iii) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate pursuant to (ii)
above; and (iv) any documents of notarial instruments evidencing the powers of
attorney of each officer to the extent not included in the resolutions referred
to in item (ii)(B) above.
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(c) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Responsible Officer of
Parent and each Borrower, confirming compliance with the conditions precedent
set forth in paragraphs (b) and (c) of Section 4.01.
(d) The Administrative Agent shall have received all
fees, costs and expenses due and payable on or prior to the Closing Date,
including the fees referred to in Sections 2.05(b).
(e) The Pledge Agreement shall have been duly executed by
the parties thereto and delivered to the Collateral Agent and shall be in full
force and effect, and all the outstanding Capital Stock of the Persons pledged
thereunder shall have been duly and validly pledged thereunder (for purposes of
U.S. law, insofar as such law may be applicable) to the Collateral Agent for the
ratable benefit of the Secured Parties and (to the extent required to perfect
the pledge of Capital Stock of any Foreign Subsidiary thereunder) to the extent
such Capital Stock is certificated, certificates representing such shares,
accompanied by instruments of transfer and stock powers endorsed in blank, shall
be in the actual possession of the Collateral Agent, provided that (i) neither
JCI nor any Domestic Subsidiary shall be required to pledge more than 65% of the
Voting Stock of any Foreign Subsidiary of such Person and (ii) no Foreign
Subsidiary of JCI shall be required to pledge the Capital Stock of any of its
Foreign Subsidiaries.
(f) The Mexican Pledge Agreement shall have been duly
executed by the parties thereto and delivered to the Collateral Agent and shall
be in full force and effect, and all the outstanding Capital Stock pledged
thereunder shall have been duly and validly pledged in favor of the Collateral
Agent for the ratable benefit of the Secured Parties, and the Collateral Agent
shall have received (i) the original stock certificates representing the Capital
Stock pledged thereunder, duly endorsed "in pledge" (en prenda) in favor of the
Collateral Agent for the benefit of the Secured Parties, and (ii) a copy of the
entry made in the stock registry book (libro de registro de acciones) of each
issuer of Capital Stock pledged thereunder, evidencing that the pledge and
security interest created threreunder has been duly registered in the stock
registry book (libro de registro de acciones) of each such issuer.
(g) The U.S. Security Agreement shall have been duly
executed by the Loan Parties party thereto and shall have been delivered to the
Collateral Agent and shall be in full force and effect on such date and each
document (including each Uniform Commercial Code financing statement) required
by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Collateral Agent for
the benefit of the Secured Parties a valid, legal and perfected first-priority
security interest in and lien on the Collateral (subject to any Lien expressly
permitted by Section 6.02) described in such agreement shall have been delivered
to the Collateral Agent.
(h) The Mexican Security Agreement shall have been duly
executed, in the presence of a Mexican notary public, by the Loan Parties party
thereto, the Collateral Agent, and the Trustee and shall be in full force and
effect on such date in accordance with the terms thereof, and (i) the public
deed (escritura publica) containing the Mexican Security Agreement shall have
been duly presented for registration in the Mexican public registries of
commerce and the Mexican public registries of property referred to in the
Mexican Security Agreement; (ii) the Collateral Agent shall have received a
certificate issued by the relevant Mexican notary public certifying that the
public deed (escritura publica) containing the Mexican Security Agreement has
been
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duly presented for registration in the Mexican public registries of commerce and
the Mexican public registries of property referred to in, and in accordance
with, the Mexican Security Agreement; and (iii) the Trustee shall have received
from JCSA the original stock certificates representing the JCSA Shares (Acciones
de JCSA; as such term is defined in the Mexican Security Agreement), duly
endorsed "in property" (en propiedad) in favor of the Trustee, together with a
copy of the entry made in the stock registry book (libro de registro de
acciones) of each issuer of the JCSA Shares transferred thereunder, evidencing
that such transfer of title to the Trustee has been duly registered in the stock
registry book (libro de registro de acciones) of each such issuer.
(i) The Collateral Agent shall have received the results
of a search of the Uniform Commercial Code (or equivalent) filings made with
respect to the JCI in the states (or other jurisdictions) within the United
States of America in which the chief executive office of each such Person is
located, any offices of such Persons in which records have been kept relating to
Accounts (as defined in the Security Documents) and the other jurisdictions in
which Uniform Commercial Code filings (or equivalent filings, if any,) are to be
made pursuant to such security document, together with copies of the financing
statements (or similar documents) disclosed by such search, and accompanied by
evidence reasonably satisfactory to the Collateral Agent that the Liens
indicated in any such financing statement (or similar document) would be
permitted under Section 6.02 or have been released.
(j) The Collateral Agent shall have received a Perfection
Certificate with respect to JCI dated the Closing Date and duly executed by a
Responsible Officer of JCI.
(k) (i) Each of the Mortgages, in form and substance
reasonably satisfactory to the Lenders, relating to each of the Mortgaged
Properties shall have been duly executed by the parties thereto and delivered to
the Collateral Agent and shall be in full force and effect, (ii) each of such
Mortgaged Properties shall not be subject to any Lien other than those permitted
under Section 6.02, (iii) each of such Mortgages shall have been filed and
recorded in the recording office as specified on Schedule 4.02(k) (or a lender's
title insurance policy, in form and substance reasonably acceptable to the
Collateral Agent, insuring such Mortgages as a first lien on such Mortgaged
Property (subject to any Lien permitted by Section 6.02) shall have been
received by the Collateral Agent) and, in connection therewith, the Collateral
Agent shall have received evidence satisfactory to it of each such filing and
recordation and (iv) the Collateral Agent shall have received such other
documents, including a policy or policies of title insurance issued by a
nationally recognized title insurance company, together with such endorsements,
coinsurance and reinsurance as may be reasonably requested by the Collateral
Agent and the Lenders, insuring the Mortgages as valid first liens on the
Mortgaged Properties, free of Liens other than those permitted under Section
6.02, together with such surveys, abstracts and appraisals required to be
furnished pursuant to the terms of the Mortgages or this Agreement.
(l) Each of the Guarantee Agreements shall have been duly
executed by the parties thereto, shall have been delivered to the Collateral
Agent and shall be in full force and effect.
(m) The Indemnity, Subrogation and Contribution Agreement
with respect to the Mexican Subsidiary Guarantee shall have been duly executed
by the parties thereto, shall have been delivered to the Collateral Agent and
shall be in full force and effect.
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(n) The Administrative Agent shall have received a copy
of, or a certificate as to coverage under, the insurance policies required by
Section 5.06 and the applicable provisions of the Security Documents, each of
which shall be endorsed or otherwise amended to include a "standard" or "New
York" lender's loss payable endorsement and to name the Administrative Agent as
additional insured, in form and substance reasonably satisfactory to the
Administrative Agent.
(o) The actions described in clauses (i) through (ix) of
the definition of Transactions shall have been, or substantially simultaneously
with the first Credit Event shall be, consummated.
(p) The Borrowers shall have received at least
$200,000,000 in gross cash proceeds from the issuance of the New Notes.
(q) Lux S.A., Parent, each Borrower and their respective
Subsidiaries shall have obtained all consents and approvals of Governmental
Authorities and third parties necessary in connection with the Transactions and
the continuing operations of Parent and its Subsidiaries (after giving effect to
the Transactions), except to the extent that the failure to obtain such consents
and approvals would not reasonably be expected to have a Material Adverse
Effect; all such consents and approvals shall be in full force and effect and
all applicable waiting periods under applicable law shall have expired without
any governmental or judicial action being taken that has had or would reasonably
likely to have the effect of restraining, preventing or imposing materially
burdensome conditions on the Transactions and the other transactions
contemplated hereby.
(r) The Lenders shall have received a certificate from a
financial officer of the Parent, reasonably satisfactory in form and substance
to the Administrative Agent, confirming the solvency of the Parent and its
Subsidiaries on a consolidated basis after giving effect to the Transactions and
the other transactions contemplated hereby.
(s) The Administrative Agent shall have received (i)
original certified copies of each public deed containing the special irrevocable
power of attorney granted, before the presence of a Mexican notary public, by
each of DCJ (in the form of Exhibit P-1), JCSA (in the form of Exhibit P-2), the
DCJ Subsidiary Guarantors, if any (in the form of Exhibit P-3), and the JCSA
Subsidiary Guarantors (in the form of Exhibit P-3), in favor of the Process
Agent, irrevocably appointing the Process Agent to act as such on behalf of each
such Persons in connection with the relevant Loan Documents; and (ii) a letter
to such effect and written evidence of acceptance by the Process Agent of each
such appointment in form reasonably satisfactory to the Administrative Agent.
ARTICLE V
Affirmative Covenants
Each of Parent and each Borrower hereby agrees that, from and
after the Closing Date, so long as any Commitments shall remain in effect, and
thereafter until all outstanding Letters of Credit have been canceled or
expired, and payment in full of the Loans, all reimbursement obligations under
any L/C Disbursement then due and owing, and any other amount then due and
owing, to any Lender or the Administrative Agent hereunder or under any Note,
each of Parent and each Borrower shall and (except in the case of delivery of
financial information) shall cause each of its Subsidiaries to:
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SECTION 5.01. Financial Statements. Furnish to the
Administrative Agent and each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of Parent, a copy of the consolidated balance
sheet of Parent as at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by Ernst &
Young LLP or other independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of each
fiscal year of Parent, the unaudited consolidated balance sheet of Parent as at
the end of such fiscal quarter and the related unaudited consolidated statements
of income and retained earnings and of cash flows of Parent for such fiscal
quarter and the portion of the fiscal year through the end of such fiscal
quarter, setting forth in each case in comparative form the figures for the
previous fiscal year, certified by a Responsible Officer as being fairly stated
in all material respects (subject to normal year-end audit and other
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by a Responsible Officer and disclosed therein, and
except, in the case of any financial statements delivered pursuant to Section
5.01(b), for the absence of certain notes).
SECTION 5.02. Certificates; Other Information. Furnish to the
Administrative Agent and each Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.01(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that, in making the audit necessary therefor, no knowledge was obtained of any
Default or Event of Default, insofar as the same relates to any financial
accounting matters covered by their audit, except as specified in such
certificate;
(b) concurrently with the delivery of the financial
statements referred to in Sections 5.01(a) and (b), a certificate of Parent,
executed on behalf of Parent by a Responsible Officer of Parent, stating that,
to the best of such Responsible Officer's knowledge, during such period (i) no
Subsidiary has been formed or acquired (or, if any such Subsidiary has been
formed or acquired, either Borrower has complied with the requirements of
Section 5.11 with respect thereto), (ii) neither Borrower nor any other Loan
Party has changed its name, its jurisdiction of organization, its principal
place of business or its chief executive office without complying with the
requirements of this Agreement and the Security Documents with respect thereto
and (iii) to the best of such Responsible Officer's knowledge, each Borrower and
each of the other Loan Parties has observed or performed all of its covenants
and other agreements, and satisfied every condition, contained in this Agreement
and the other Loan Documents to be observed, performed or satisfied by it (and
including therein a reasonably detailed calculation of the covenants set forth
in Sections 6.11, 6.12 and 6.13 and, in the case of the annual financial
statements, of Excess Cash Flow as of the last day of such period), and that
such
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Responsible Officer has obtained no knowledge of any Default or Event of Default
except, in each case, as specified in such certificate;
(c) not later than 90 days after the beginning of each
fiscal year of Parent, a copy of the projections by Parent of the operating
budget and cash flow budget of Parent and the Subsidiaries for such fiscal year,
such projections to be accompanied by a certificate of a Responsible Officer to
the effect that such Responsible Officer believes such projections have been
prepared on the basis of reasonable assumptions;
(d) within five Business Days after the same are sent,
copies of all financial statements and reports which Parent or either Borrower
sends to its public securityholders, and within five Business Days after the
same are filed, copies of all financial statements and reports which Parent,
either Borrower or any Subsidiary of either Borrower may make to, or file with,
the Securities and Exchange Commission or any successor or analogous
Governmental Authority; and
(e) promptly, such additional financial and other
information as the Administrative Agent or any Lender (acting through the
Administrative Agent) may from time to time reasonably request.
SECTION 5.03. Payment of Obligations. Pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all its material obligations of whatever nature, except where the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of Parent or the applicable Subsidiary,
as the case may be.
SECTION 5.04. Conduct of Business and Maintenance of
Existence. Continue to engage in business of the same general type as now
conducted by Parent, the Borrowers and their respective Subsidiaries, taken as a
whole, and preserve, renew and keep in full force and effect its corporate
existence and take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of the business of
Parent, the Borrowers and the Subsidiaries, taken as a whole, except as
otherwise permitted pursuant to Section 6.04 or in connection with the
Transactions, provided that none of Parent, either Borrower or any of their
Subsidiaries shall be required to maintain any such rights, privileges and
franchises, if the failure to do so would not reasonably be expected to have a
Material Adverse Effect; and comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith would
not, in the aggregate, be reasonably expected to have a Material Adverse Effect.
SECTION 5.05. Maintenance of Property. Keep all property
useful and necessary in the business of the Borrowers and the Subsidiaries of
the Borrowers, taken as a whole, in good working order and condition.
SECTION 5.06. Insurance. Maintain with financially sound and
reputable insurance companies insurance on all its property material to the
business of Parent, the Borrowers and their respective Subsidiaries, taken as a
whole, in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and furnish to the Administrative Agent, upon written request,
full information as to the insurance carried.
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SECTION 5.07. Inspection of Property; Books and Records;
Discussions. Keep proper books of records and account in which full, complete
and correct entries in conformity with all material Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of the Administrative Agent or any Lender
(acting through the Administrative Agent), at any reasonable time, upon
reasonable notice, and as often as may reasonably be desired, to visit and
inspect any of its properties and examine and, to the extent reasonable, make
abstracts from any of its books and records and to discuss the business,
operations, properties and financial and other condition of Parent and its
Subsidiaries with officers and employees of Parent and its Subsidiaries and with
their independent certified public accountants, in each case, (a) at the expense
of Parent and the Borrowers (i) with respect to any such actions by a Lender
during the continuance of a Default or an Event of Default or as otherwise
required by Section 9.06 or (ii) with respect to any such actions by the
Administrative Agent and (b) at the expense of the relevant Lender in any other
case.
SECTION 5.08. Notices. Promptly give notice to the
Administrative Agent, the Issuing Bank and each Lender of:
(a) as soon as possible after a Responsible Officer of
Parent or either Borrower knows or reasonably should know thereof, the
occurrence of any Default or Event of Default;
(b) as soon as possible after a Responsible Officer of
Parent or either Borrower knows or reasonably should know thereof, any (i)
default or event of default under any Contractual Obligation of Parent, either
Borrower or any of their respective Subsidiaries other than as previously
disclosed to the Lenders, or (ii) litigation, investigation or proceeding which
may exist at any time between Parent, either Borrower or any of the Subsidiaries
of the Borrowers and any Governmental Authority, which in either case, if not
cured or if adversely determined, as the case may be, would reasonably be
expected to have a Material Adverse Effect;
(c) as soon as possible after a Responsible Officer of
Parent or either Borrower knows or reasonably should know thereof, any
litigation or proceeding which has a reasonable possibility of an adverse
determination which would result in a judgment against Parent, either Borrower
or any of their respective Subsidiaries of $5,000,000 or more and which is not
covered by insurance, or in which injunctive or similar relief is sought that
would reasonably be expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any
event within 30 days after a Responsible Officer of Parent or either Borrower
knows or reasonably should know thereof: (i) the occurrence or expected
occurrence of any Reportable Event with respect to any Single Employer Plan
(other than a Reportable Event described in Section 4043(c)(9) of ERISA), a
failure to make any required contribution to a Single Employer Plan or
Multiemployer Plan, the creation of any Lien on the property of Parent, either
Borrower or any of the Subsidiaries in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan, if, as a result thereof, Parent, either Borrower or any of
the Subsidiaries would reasonably be expected to incur any material liability;
(ii) the existence of an Underfunding under a Single Employer Plan that exceeds
10% of the value of the assets of such Single Employer Plan, determined as of
the most recent annual valuation date of such Single Employer Plan on the basis
of the actuarial assumptions used to determine
69
the funding requirements of such Single Employer Plan as of such date; (iii) the
institution of proceedings or the taking of any other formal action by the PBGC
or Parent, either Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Single Employer Plan or Multiemployer Plan
if, as a result thereof, Parent, either Borrower or any of the Subsidiaries
would reasonably be expected to incur any material liability; (iv) the
occurrence or expected occurrence of any event or condition under which Parent,
either Borrower or any Commonly Controlled Entity has incurred or would
reasonably be expected to incur any liability in respect of a Former Plan; or
(v) with respect to any Foreign Benefit Plan, the occurrence of any material
noncompliance with applicable foreign law or the incurrence by either Borrower
or any other Loan Party of any material liability;
(e) as soon as possible after a Responsible Officer of
Parent or either Borrower knows, and except as would not, individually or in the
aggregate, reasonably be expected to result in the payment of a Material
Environmental Amount, that (i) any Governmental Authority has identified Parent,
either Borrower or any of the Subsidiaries as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") or any similar Environmental Law for the cleanup of Materials of
Environmental Concern at any location, whether or not owned, leased or operated
by Parent, either Borrower or any of the Subsidiaries; (ii) any Governmental
Authority may revoke any permit pursuant to Environmental Law held by Parent,
either Borrower or any of the Subsidiaries of the Borrowers, or deny or refuse
to renew any such permit sought by Parent, either Borrower or any of the
Subsidiaries of the Borrowers; or (iii) any property owned, leased, or operated
by Parent, either Borrower or any of the Subsidiaries of the Borrowers is being
listed on, or proposed for listing on, the National Priorities List ("NPL") or
the Comprehensive Environmental Response, Compensation, and Liability
Information System ("CERCLIS") maintained by the U.S. Environmental Protection
Agency or any similar list maintained by any Governmental Authority; and
(f) as soon as possible after a Responsible Officer of
Parent or either Borrower knows or reasonably should know thereof, any
development or event which as had or would reasonably be expected to have a
material adverse change in the business, operations, property or condition
(financial or otherwise) of Parent, either Borrower and the Subsidiaries, taken
as a whole.
Each notice pursuant to this Section 5.08 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Parent or the applicable Borrower proposes to
take with respect thereto.
SECTION 5.09. Environmental Laws. (a) Comply substantially
with all Environmental Laws applicable to it, and obtain, comply substantially
with and maintain any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws (collectively,
"Environmental Permits"); and (b) take all reasonable efforts to ensure that all
of its tenants, subtenants, contractors, subcontractors and invitees comply
substantially with all Environmental Laws, and obtain, comply substantially with
and maintain any and all Environmental Permits applicable to any of them insofar
as any failure to so comply, obtain or maintain reasonably would be expected to
adversely affect Parent, either Borrower or any of the Subsidiaries of the
Borrowers. For purposes of this Section 5.09(a), noncompliance shall be deemed
not to constitute a breach of this covenant, provided that, upon learning of any
actual or suspected noncompliance, Parent or the applicable Borrower shall in a
timely manner
70
undertake all reasonable efforts to achieve substantial compliance, and provided
further that, in any case, such noncompliance, and any other such noncompliance
with any Environmental Law or Environmental Permit, individually or in the
aggregate, would not reasonably be expected to give rise to the payment of a
Material Environmental Amount.
SECTION 5.10. Use of Proceeds. Use the proceeds of the Loans
and request the issuance of Letters of Credit only for the purposes set forth in
the preamble to this Agreement.
SECTION 5.11. Additional Collateral; Further Assurances. (a)
With respect to any owned real property or fixtures located on owned real
property, in each case with a purchase price or a fair market value of at least
$1,000,000, in which either Borrower, JCSA, a Domestic Subsidiary of JCI, any
Subsidiary of DCJ, or any Subsidiary of JCSA acquires ownership rights at any
time after the Closing Date, promptly grant to the Collateral Agent, for the
benefit of the Lenders, a Lien of record on all such owned real property and
fixtures, upon terms reasonably satisfactory in form and substance to the
Collateral Agent and in accordance with any applicable requirements of any
Governmental Authority (including any appraisals of such property under the
Financial Institutions Reform, Recovery and Enforcement Act of 1989 which the
Collateral Agent reasonably deems to be required by law), provided that (i)
nothing in this Section 5.11(a) shall defer or impair the attachment or
perfection of any security interest in any Collateral covered by any of the
Security Documents which would attach or be perfected pursuant to the terms
thereof without action by either Borrower, any of its Subsidiaries, JCSA, any of
its Subsidiaries, or any other Person and (ii) no such Lien shall be required to
be granted as contemplated by this Section 5.11(a) on any owned real property or
fixtures the acquisition of which is financed, or is to be financed within any
time period permitted by Section 6.01, until such Indebtedness is repaid in full
(and not refinanced as permitted by Section 6.01) or, as the case may be, the
Borrowers or JCSA determine not to proceed with such financing or refinancing.
In connection with any such grant to the Collateral Agent, for the benefit of
the Lenders, of a Lien of record on any such real property in accordance with
this Section 5.11, the applicable Borrower, JCSA or such Subsidiary shall
deliver or cause to be delivered to the Collateral Agent any surveys, title
insurance policies, environmental reports and other documents in connection with
such grant of such Lien obtained by it in connection with the acquisition of
such ownership rights in such real property or as the Collateral Agent shall
reasonably request (in light of the value of such real property and the cost and
availability of such surveys, title insurance policies, environmental reports
and other documents and whether the delivery of such surveys, title insurance
policies, environmental reports and other documents would be customary in
connection with such grant of such Lien in similar circumstances).
(b) With respect to any Person that, subsequent to the
Closing Date, becomes (i) a Domestic Subsidiary of Parent, (ii) a Foreign
Subsidiary Holdco or (iii) a Subsidiary of DCJ or JCSA, promptly upon the
request of the Administrative Agent: (x) execute and deliver to the
Administrative Agent, for the benefit of the Secured Parties, a new pledge
agreement or a supplement to the Pledge Agreement, the Mexican Pledge Agreement
and/or the Mexican Security Agreement, as the case may be, as the Administrative
Agent shall reasonably deem necessary or reasonably advisable to grant to the
Collateral Agent, for the benefit of the Secured Parties, a Lien on the Capital
Stock of such Subsidiary which, with respect to any Domestic Subsidiary, is
owned by Parent or any of its Subsidiaries or, with respect to any Subsidiary of
DCJ or JCSA, owned by DCJ, JCSA or any of their respective Subsidiaries, (y)
deliver to the Collateral Agent the certificates (if any) representing such
Capital Stock, together with undated stock powers
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executed and delivered in blank or, with respect to certificates representing
Capital Stock of a Mexican Subsidiary of DCJ or JCSA, duly endorsed "property"
(en propiedad) in favor of the Trustee, in either case, by a duly authorized
officer of the applicable Borrower or such Subsidiary, as the case may be, and
(z) cause such new Subsidiary (if it is a Subsidiary of either Borrower) (A) to
become a party to the applicable Security Documents and Guarantee Agreements, in
each case pursuant to documentation which is in form and substance reasonably
satisfactory to the Administrative Agent, and (B) to take all actions reasonably
deemed by the Administrative Agent to be necessary or reasonably advisable to
cause the Lien created by the applicable Security Documents to be duly perfected
in accordance with all applicable Requirements of Law, including, without
limitation, the filing of financing statements in such jurisdictions as may be
reasonably requested by the Administrative Agent.
(c) With respect to any Person that, subsequent to the
Closing Date, becomes a Foreign Subsidiary of, and which has Voting Stock which
is owned directly by, (i) JCI or (ii) a Domestic Subsidiary of Parent, promptly
upon the request of the Administrative Agent: (A) JCI or such Domestic
Subsidiary shall execute and deliver to the Administrative Agent a new Pledge
Agreement and/or a new Mexican Pledge Agreement or a supplement to the Pledge
Agreement, the Mexican Pledge Agreement and/or the Mexican Security Agreement,
as the case may be, as the Administrative Agent shall reasonably deem necessary
or reasonably advisable to grant to the Collateral Agent, for the benefit of the
Secured Parties, a Lien on the Capital Stock of such Foreign Subsidiary which is
owned directly by JCI or any such Domestic Subsidiary of Parent (provided that
in no event shall more than 65% of the Voting Stock of any such Foreign
Subsidiary be required to be so pledged) and (ii) to the extent reasonably
deemed advisable by the Administrative Agent to perfect such security interest,
deliver to the Administrative Agent certificates (if any) representing such
Voting Stock, together with undated stock powers executed and delivered in blank
or, with respect to certificates representing Capital Stock of a Foreign
Subsidiary that is a Mexican Subsidiary, duly endorsed "in property" (en
propiedad) in favor of the Trustee, or duly endorsed "in pledge" (en prenda), as
applicable, in any case, by a duly authorized officer of JCI or such Domestic
Subsidiary of Parent, as the case may be.
(d) Notwithstanding anything to the contrary contained
herein, no Subsidiary shall be required to comply with the provisions of this
Section 5.11 until such date as either (i) the consolidated gross revenues of
such Subsidiary and its Subsidiaries for the most recently completed period of
four consecutive fiscal quarters or (ii) the consolidated assets of such
Subsidiary and its Subsidiaries, exceed $2,500,000 (it being understood that any
such Subsidiary which achieves such assets or revenues after the date hereof
shall be deemed, for purposes of this Section 5.11 only, to have been newly
acquired by Parent or the applicable Borrower on the date upon which such assets
or revenues, as the case may be, are achieved).
(e) No later than thirty (30) days following the Closing
Date (which period of time may be extended by the Administrative Agent in its
reasonable discretion), Parent agrees (i) to cause Distribuidora Venus, S.A. de
C.V. to transfer the cosmetics manufacturing plant located in Xxxxxxxx Xx. 00,
Xxxxxxxxx, Xxxxxx de Mexico (the "Manufacturing Plant") to BankBoston S.A.,
Institucion de Banca Multiple, or another financial or trust institution
reasonably acceptable to Parent and the Administrative Agent, in trust pursuant
to an irrevocable management trust agreement governed by the laws of Mexico (the
"Management Trust Agreement") in form and substance reasonably acceptable to
Parent and the Administrative Agent and (ii) to do or cause to be done all such
other acts, and to execute and deliver such documents and take such other action
as
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the Administrative Agent deems reasonably necessary or advisable to perfect the
transfer and assignment to the Trustee (acting in such capacity under the
Mexican Security Agreement) of any and all rights of Distribuidora Venus, S.A.
de C.V., in its capacity as settlor and beneficiary under the Management Trust
Agreement (including, without limitation, its reversion rights (derechos de
reversion) thereunder) for the purposes set forth in the Mexican Security
Agreement, in each case, upon terms reasonably satisfactory in form and
substance to the Administrative Agent and in accordance with any applicable
requirements of any Governmental Authority, provided that nothing in this
Section 5.11(e) shall defer or impair the attachment or perfection of any
security interest in any Collateral covered by any of the Security Documents
which would attach or be perfected pursuant to the terms thereof without action
by Parent, either Borrower or any of their respective Subsidiaries, or any other
Person, as the case may be; provided, however, that in the event that any
recordation fees and/or taxes due and payable in accordance with applicable law
by Distribuidora Venus, S.A. de C.V. or any Loan Party as a result of the
creation of the Management Trust Agreement or any of the actions undertaken
pursuant to item (ii) above materially exceed the sum of any recordation fees
and/or taxes that have been paid by any Loan Party in connection with real
estate transferred directly to the Trustee pursuant to the Mexican Security
Agreement on or about the Closing Date, the Loan Parties hereby agree to work
together in good faith with the Administrative Agent to devise and implement a
reasonable alternative structure with respect to the Manufacturing Plant to
grant to the Collateral Agent a first priority Lien for the benefit of the
Secured Parties in the Manufacturing Plant.
ARTICLE VI
Negative Covenants
Each of Parent and each Borrower hereby agrees that, so long
as the Revolving Credit Commitments remain in effect, and thereafter until all
outstanding Letters of Credit have been canceled or expired, and payment in full
of the Revolving Loans and the Term Loans, all L/C Disbursements then due and
owing, and any other amount then due and owing hereunder or under any Note to
any Lender, each of Parent and each Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
SECTION 6.01. Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date
hereof and set forth on Schedule 6.01(a);
(b) Indebtedness created hereunder and under the other
Loan Documents;
(c) Indebtedness of the Borrowers on account of the New
Notes;
(d) Guarantees:
(i) of the New Notes, provided that (x) such Guarantees are
subordinated to the Obligations to the same extent as the New Notes and (y) no
Subsidiary shall Guarantee all or any part of the New Notes unless such
Subsidiary also Guarantees the Obligations;
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(ii) in connection with up to an aggregate principal amount of
$10,000,000 of Indebtedness outstanding at any time incurred by any Management
Investors in connection with any Management Subscription Agreements or other
purchases by them of Capital Stock of an Ultimate Parent, Parent or any of its
Subsidiaries, and any refinancings, refundings, extensions or renewals thereof,
provided that such amount shall be reduced by the aggregate then outstanding
principal amount of loans and advances made in reliance upon the provisions of
Section 6.03(k);
(iii) in respect of third-party loans and advances to officers
or employees of Parent or any of its Subsidiaries (x) for travel and
entertainment expenses incurred in the ordinary course of business, (y) for
relocation expenses incurred in the ordinary course of business or (z) for other
purposes, and in the case of this clause (z), in an aggregate amount (as to
Parent and all its Subsidiaries) of up to $1,500,000 outstanding at any time;
(iv) by any Subsidiary (other than a Foreign Subsidiary
Holdco) in respect of Indebtedness of a Person in connection with joint ventures
or similar arrangements in respect of which no other co-investor or other Person
has a greater legal or beneficial ownership interest than Parent and its
Subsidiaries, and as to all of such Persons does not at any time exceed
$7,500,000 in aggregate principal amount, provided that (x) such amount shall be
increased by an amount equal to $1,000,000 on each anniversary of the Closing
Date, commencing on the second anniversary of the Closing Date, so long as no
Default or Event of Default shall have occurred and be continuing on any date on
which such amount is to be increased and (y) such amount and any increase in
such amount permitted by clause (x) shall be reduced by the aggregate amount of
Investments permitted by Section 6.03(i);
(v) of Parent and its Subsidiaries under any Hedging
Agreements; and
(vi) other than those described in clauses (i) through (v) of
this paragraph (d), by any Subsidiary (other than a Foreign Subsidiary Holdco)
in an aggregate amount not to exceed $2,500,000;
(e) to the extent that any Indebtedness may be incurred
or arise thereunder, Indebtedness of Parent and any of its Subsidiaries under
any Hedging Agreements;
(f) Indebtedness of Parent to any wholly owned Subsidiary
and Indebtedness of any Subsidiary to Parent or any other wholly owned
Subsidiary of Parent;
(g) additional Indebtedness of Parent or any of its
Subsidiaries which is subordinated to the obligations of the Loan Parties
hereunder not exceeding $20,000,000 in aggregate principal amount at any one
time outstanding, provided that any such Indebtedness shall have terms and
conditions which are not materially more burdensome to the Loan Parties than,
and subordination provisions substantially similar to, the New Notes;
(h) Indebtedness of any Subsidiary (other than any
Foreign Subsidiary Holdco) incurred to finance or refinance the purchase price
of, or Indebtedness of any Subsidiary (other than any Foreign Subsidiary Holdco)
assumed in connection with, any Permitted Acquisition permitted by Section
6.03(n), provided that (i) such Indebtedness is incurred prior to, substantially
simultaneously with or within six months after such acquisition or in connection
with a refinancing thereof, (ii) if such Indebtedness is owed
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to a Person, other than the Person from whom such acquisition is made or any
Affiliate thereof, such Indebtedness shall have terms and conditions reasonably
satisfactory to the Required Lenders and shall not exceed 60% of the purchase
price of such acquisition (including any Indebtedness (excluding subordinated
Indebtedness) assumed in connection with such acquisition but excluding any
Indebtedness under this Agreement incurred to finance such acquisition), (iii)
immediately after giving effect to such acquisition no Default or Event of
Default shall have occurred and be continuing and (iv) the aggregate principal
amount of Indebtedness which may be incurred pursuant to this paragraph (h)
shall not exceed $10,000,000 during the term of this Agreement; and any
refinancing, refunding, renewal or extension of any such Indebtedness; provided
further that, the amount of such Indebtedness is not increased at the time of
such refinancing, refunding, renewal or extension except by an amount equal to
the premium or other amounts paid, and fees and expenses incurred, in connection
with such refinancing, refunding, renewal or extension;
(i) Indebtedness of a Person that becomes a Subsidiary of
either Borrower after the date hereof, provided that (i) such Indebtedness
existed at the time such Person became a Subsidiary and was not created in
anticipation thereof, (ii) immediately after giving effect to the acquisition of
such Person by the applicable Borrower, no Default or Event of Default shall
have occurred and be continuing and (iii) the aggregate principal amount of
Indebtedness which may be incurred pursuant to this paragraph (i) shall not
exceed $15,000,000 during the term of this Agreement; and any refinancing,
refunding, renewal or extension of any such Indebtedness;
(j) Indebtedness of any Subsidiary (other than any
Foreign Subsidiary Holdco) incurred to finance or refinance the acquisition of
fixed or capital assets (whether pursuant to a loan, a Financing Lease or
otherwise) and any other Financing Leases in an aggregate principal amount not
exceeding as to the Borrowers and all Subsidiaries $10,000,000 at any time
outstanding;
(k) Indebtedness of any of DCJ, JCSA, and their
respective Mexican Subsidiaries incurred in the ordinary course of business to
finance the working capital needs of any of DCJ, JCSA and such Subsidiaries,
provided that the aggregate principal amount of any such Indebtedness at any
time outstanding pursuant to this paragraph (k) shall not exceed $5,000,000 (or
the equivalent thereof in Mexican Pesos);
(l) Indebtedness of Foreign Subsidiaries (other than
Mexican Subsidiaries and Foreign Subsidiary Holdcos) of Parent incurred in the
ordinary course of business to finance the working capital needs of such Foreign
Subsidiaries;
(m) Indebtedness of Parent or any of its Subsidiaries
incurred to finance insurance premiums in the ordinary course of business;
(n) Indebtedness arising from the honoring of a check,
draft or similar instrument against insufficient funds, provided that such
Indebtedness is extinguished within two Business Days of its incurrence;
(o) Indebtedness of any Foreign Subsidiary (other than
any Foreign Subsidiary Holdco) of Parent fully supported on the date of the
incurrence thereof by a Foreign Backstop Letter of Credit;
(p) Indebtedness arising from performance, appeal,
judgment, replevin and similar bonds and suretyship arrangements, all in the
ordinary course of business;
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(q) Indebtedness to finance loans and advances to
Consultants in the ordinary course of business in an aggregate amount not to
exceed $5,000,000 outstanding at any time (or the equivalent thereof in Mexican
Pesos); and
(r) additional Indebtedness of Subsidiaries (other than
Foreign Subsidiary Holdcos) of Parent, provided that the aggregate principal
amount of any such Indebtedness incurred pursuant to this paragraph (r) (i) by
all such Subsidiaries shall not exceed $10,000,000 (or the equivalent thereof in
the applicable foreign currencies) and (ii) by Domestic Subsidiaries and Mexican
Subsidiaries of Parent shall not exceed $2,000,000 (or the equivalent thereof in
applicable foreign currencies).
SECTION 6.02. Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, now owned or hereafter
acquired by it, except:
(a) Liens existing on the date hereof and set forth on
Schedule 6.02(a);
(b) Liens created pursuant to the Loan Documents;
(c) Liens for taxes, assessments and similar charges not
yet delinquent or the nonpayment of which in the aggregate would not reasonably
by expected to have a Material Adverse Effect, or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of Parent or the Subsidiaries, as
the case may be, in conformity with GAAP (or, in the case of relevant Foreign
Subsidiaries of Parent, generally accepted accounting principles in effect from
time to time in their respective jurisdictions of organization);
(d) pledges, deposits or other Liens in connection with
workers' compensation, unemployment insurance and other social security benefits
or other insurance related obligations (including pledges or deposits or other
Liens securing liability to insurance carriers under insurance or self-insurance
arrangements);
(e) Liens to secure the performance of bids, trade
contracts (other than for borrowed money), obligations for utilities, leases,
statutory obligations, surety and appeal bonds, performance bonds, judgment and
like bonds, replevin and similar bonds and other obligations of a like nature
incurred in the ordinary course of business;
(f) zoning restrictions, easements, rights-of-way,
restrictions, other similar encumbrances incurred in the ordinary course of
business and minor irregularities of title which do not materially interfere
with the ordinary conduct of the business of Parent and its Subsidiaries taken
as a whole;
(g) Liens securing Indebtedness of Parent and its
Subsidiaries permitted by Section 6.01(h) or Section 6.01(j), provided that (i)
such Liens shall be created prior to, substantially simultaneously with or
within six months of the acquisition thereby financed or the date of the
incurrence or assumption of such Indebtedness and (ii) such Liens do not at any
time encumber any property other than the property financed by such
Indebtedness;
(h) Liens on the property or assets of a Person which
becomes a Subsidiary after the date hereof securing Indebtedness permitted by
Section 6.01(i), provided that (i) such Liens existed at the time such Person
became a Subsidiary and
76
were not created in anticipation thereof and (ii) any such Lien is not spread to
cover any property or assets of such Person after the time such Person becomes a
Subsidiary;
(i) Liens of landlords or of mortgagees of landlords
arising by operation of law or pursuant to the terms of real property leases,
provided that the rental payments secured thereby are not yet due and payable;
(j) Liens arising by reason of any judgment, decree or
order of any court or other Governmental Authority, if appropriate legal
proceedings which may have been duly initiated for the review of such judgment,
decree or order, are being diligently prosecuted and shall not have been finally
terminated or the period within which such proceedings may be initiated shall
not have expired;
(k) Liens existing on assets or properties at the time of
the acquisition thereof by Parent or any of the Subsidiaries which do not
materially interfere with the use, occupancy, operation and maintenance of
structures existing on the property subject thereto or extend to or cover any
assets or properties of Parent or such Subsidiary other than the assets or
property being acquired;
(l) any encumbrance or restriction (including, without
limitation, put and call agreements) with respect to the Capital Stock of any
joint venture or similar arrangement pursuant to the joint venture or similar
agreement with respect to such joint venture or similar arrangement, provided
that no such encumbrance or restriction affects in any way the ability of Parent
or any of the Subsidiaries to comply with the provisions of Section 5.11;
(m) Liens on property of any Foreign Subsidiary of Parent
securing Indebtedness of such Foreign Subsidiary of Parent permitted by Sections
6.01(d)(iv), 6.01(l) and 6.01(r);
(n) Liens securing Guarantees permitted under Section
6.01(d)(ii) or (iii);
(o) Liens on the accounts receivable and inventory of the
Mexican Subsidiaries of Parent to secure Indebtedness permitted by Section
6.01(k), provided that such Liens secure only such Indebtedness and do not
extend to the assets of Parent or any other Subsidiary;
(p) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business that
are not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(q) Liens on the assets of Parent or its Subsidiaries
(not otherwise permitted hereunder) which secure obligations not exceeding (as
to the Borrowers and the Subsidiaries in the aggregate) $2,500,000 in aggregate
amount at any time outstanding;
(r) Liens on Intellectual Property and foreign patents,
trademarks, trade names, copyrights, technology, know-how and processes to the
extent such Liens arise from the granting of licenses to use such Intellectual
Property and foreign patents, trademarks, trade names, copyrights, technology,
know-how and processes to any Person in the ordinary course of business of
Parent and its Subsidiaries; and
77
(s) Liens on deposit accounts arising by operation of law
in favor of the depository bank where such account is maintained.
SECTION 6.03. Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment (each an
"Investment") in, any Person, except:
(a) Investments existing on the Closing Date and set
forth on Schedule 6.03(a);
(b) Investments in cash and Cash Equivalents;
(c) Investments constituting Capital Expenditures
permitted pursuant to Section 6.11;
(d) extensions of trade credit in the ordinary course of
business;
(e) loans and advances to officers, directors or
employees of Parent or its Subsidiaries (i) for travel, entertainment and
relocation expenses in the ordinary course of business, (ii) for other purposes
in an aggregate amount for Parent and its Subsidiaries not to exceed $1,500,000
at any one time outstanding and (iii) relating to indemnification or
reimbursement of any officers, directors or employees in respect of liabilities
relating to their serving in any such capacity or as otherwise specified in
Section 6.07;
(f) Investments in Parent, either Borrower or any wholly
owned Subsidiary;
(g) Investments in the nature of pledges or deposits with
respect to leases or utilities provided to third parties in the ordinary course
of business or otherwise described in Section 6.02(d), (e)or(i);
(h) Investments representing non-cash consideration
received by Parent or any of its Subsidiaries in connection with any sale or
other disposition of the property of Parent or any of its Subsidiaries permitted
by Section 6.05;
(i) Investments by Parent or any of its Subsidiaries in
one or more Persons in connection with joint ventures or similar arrangements in
respect of which no other co-investor or other Person has a greater legal or
beneficial ownership interest than Parent or such Subsidiary, in an aggregate
amount, when added to the amount of Permitted Acquisitions made pursuant to
paragraph (n) below, not to exceed $25,000,000 at any one time outstanding;
(j) Investments representing evidences of Indebtedness,
securities or other property received from another Person in connection with any
bankruptcy proceeding or other reorganization of such other Person or as a
result of foreclosure, perfection or enforcement of any Lien or exchange for
evidences of Indebtedness, securities or other property of such other Person,
provided that any such securities or other property received by any Loan Party
party to any Security Document is pledged to the Collateral Agent for the
benefit of the Secured Parties pursuant to the Security Documents;
78
(k) loans and advances to Management Investors in
connection with the purchase by such Management Investors of Capital Stock of an
Ultimate Parent, Parent or any of its Subsidiaries of up to $10,000,000
outstanding at any time, provided that such amount shall be reduced by the
aggregate principal amount of Indebtedness in respect of Guarantees permitted by
Section 6.01(d)(ii);
(l) Investments in (i) the Capital Stock of Parent which
is held by Parent as treasury stock and is restored to unissued status or is
eliminated from authorized shares, or options in respect thereof or (ii) the
Capital Stock of Parent or an Ultimate Parent purchased by JCI in connection
with the exercise of management stock options issued by JCI to officers,
directors and employees of Parent and its Subsidiaries;
(m) Investments of Parent and its Subsidiaries under any
Hedging Agreements;
(n) the acquisition of all or substantially all of the
business or assets or the Capital Stock of any Person or any business unit
thereof (a "Permitted Acquisition"), provided that:
(i) such acquisition is expressly permitted by Section 6.04;
and
(ii) the aggregate consideration (including cash and any
Indebtedness assumed in connection with such acquisitions) for all such
acquisitions made pursuant to this paragraph (n), when added to the amount of
Investments permitted pursuant to paragraph (i) above, does not exceed
$25,000,000 at any time outstanding;
provided in each case that, (A) the target of such acquisition has positive
Consolidated EBITDA, calculated on a pro forma basis after giving effect to such
acquisition (such calculation to be made in a manner reasonably satisfactory to
the Administrative Agent and to be evidenced by a certificate in form and
substance reasonably satisfactory to the Administrative Agent signed by a
Responsible Officer of each Borrower and delivered to the Administrative Agent
(which shall promptly deliver copies to each Lender) at least three Business
Days prior to the consummation of such acquisition) and (B) before, and after
giving effect thereto, no Default or Event of Default shall occur as a result of
such acquisition;
(o) Investments in notes receivable and other instruments
and securities obtained in connection with transactions permitted by Section
6.05(d);
(p) loans and advances to Consultants in the ordinary
course of business in an aggregate amount not to exceed $5,000,000 outstanding
at any time;
(q) Investments in the Capital Stock of an Ultimate
Parent purchased or otherwise acquired in connection with any Exercise or a
Permitted Ultimate Parent Payment;
(r) additional Investments in an aggregate amount not to
exceed $10,000,000 at any one time outstanding; and
(s) Investments pursuant to the Transactions.
SECTION 6.04. Fundamental Changes. Enter into any merger
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any
79
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets except:
(a) any Subsidiary of Parent or either Borrower may be
merged or consolidated with or into Parent or such Borrower (provided that
Parent or such Borrower shall be the continuing or surviving corporation) or
with or into any one or more wholly owned Subsidiaries of Parent (provided that
any such wholly owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation) and DCJ may be merged with or consolidated into a Mexican
Subsidiary of Parent which is a Guarantor, with the surviving or continuing
Person, if not DCJ, assuming all the obligations of DCJ under this Agreement and
the other Loan Documents pursuant to a written agreement reasonably satisfactory
to the Administrative Agent.
(b) any Subsidiary of Parent or either Borrower may
liquidate or sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to such Parent or Borrower or
any other wholly owned Subsidiary of Parent or such Borrower (provided that no
Loan Party shall sell or otherwise dispose of any Collateral (other than
inventory in the ordinary course of business and, to the extent permitted by
Sections 6.03, 6.06 and 6.08, cash and Cash Equivalents) pursuant to this clause
(b) to any Subsidiary that is not a Loan Party);
(c) Parent may consolidate or merge with or into or
transfer all or substantially all its assets to an Affiliate incorporated or
organized for the purpose of reincorporating or reorganizing Parent in another
jurisdiction in the United States of America, the Cayman Islands, Luxembourg or
the Kingdom of the Netherlands (including the Netherlands Antilles) or any other
member of the European Union, or changing its legal structure to a corporation
or other entity, provided that (i) no such action shall be taken if to do so
would adversely affect the Secured Parties and (ii) any such successor entity to
Parent shall execute or otherwise agree in a writing reasonably satisfactory to
the Administrative Agent to be bound by all applicable Loan Documents to which
Parent is a party and take all actions reasonably requested by the
Administrative Agent to comply with Section 5.11, including the delivery of
legal opinions reasonably satisfactory to the Administrative Agent;
(d) pursuant to the Transactions; and
(e) as permitted by Section 6.05.
SECTION 6.05. Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including leasehold interests), whether now owned or hereafter acquired, or, in
the case of any Subsidiary, issue or sell any shares of such Subsidiary's
Capital Stock to any Person other than Parent or any wholly owned Subsidiary of
Parent, except:
(a) the sale or other disposition of inventory, or of
surplus, obsolete or worn out property or assets, whether now owned or hereafter
acquired, in the ordinary course of business;
(b) the sale or other disposition of any other property
or assets in the ordinary course of business (it being understood that this
shall not include the sale or other disposition of all or substantially all of
any business unit);
80
(c) the sale or other disposition of any property or
assets (other than assets described in clauses (a) and (b) above), provided that
the aggregate market value of all assets so sold or disposed of in any period of
twelve consecutive months shall not exceed $5,000,000;
(d) the sale or discount without recourse of accounts
receivable or notes receivable arising in the ordinary course of business, or
the conversion or exchange of accounts receivable into or for notes receivable
in connection with the compromise or collection thereof, provided that, in the
case of any Foreign Subsidiary, any such sale or discount may be with recourse
if such sale or discount is consistent with customary practice in such Foreign
Subsidiary's country of business;
(e) the sale or other disposition of any assets or
property by Parent or any of its Subsidiaries to Parent, either Borrower or any
wholly owned Subsidiary thereof (provided that no Loan Party shall sell or
otherwise dispose of any Collateral (other than inventory in the ordinary course
of business and, to the extent permitted by Sections 6.03, 6.06 and 6.08, cash
and Cash Equivalents) pursuant to this clause (e) to any Subsidiary that is not
a Loan Party);
(f) the sale of the Capital Stock or all or substantially
all of the assets of the Subsidiaries set forth on Schedule 6.05(f);
(g) as permitted by Section 6.04(b), (c) or (d);
(h) the abandonment, sale or other disposition of
patents, trademarks or other intellectual property that are, in the reasonable
judgment of Parent or either Borrower, no longer economically practicable to
maintain or useful in the conduct of the business of Parent, the Borrowers and
the Subsidiaries thereof taken as a whole;
(i) any sale or other disposition of the property of
Parent or any of its Subsidiaries, so long as the Net Proceeds of any such sale
or other disposition do not exceed $10,000,000 in the aggregate after the
Closing Date, provided that an amount equal to 100% of the Net Proceeds of such
sale or other disposition less the Reinvested Amount is applied in accordance
with Section 2.13(b);
(j) any issuance, sale or other disposition of preferred
stock (or equivalent equity interest) of any Subsidiary constituting
Indebtedness created, incurred, assumed or existing in compliance with Section
6.01;
(k) the sale or other disposition of Capital Stock of an
Ultimate Parent in connection with any Exercise, or the sale or other
disposition of any of any Capital Stock of an Ultimate Parent purchased or
otherwise acquired in connection with any Exercise or any Permitted Ultimate
Parent Payment; and
(l) the sale or other disposition of any Capital Stock,
property or assets of any Foreign Subsidiary existing on the Closing Date (other
than DCJ, any Mexican Subsidiary which is a Subsidiary Guarantor, Jafra
Cosmetics Dominicana S.A., CDRJ Europe Holding Company B.V. or any Subsidiary of
CDRJ Europe Holding Company B.V. existing on the Closing Date), or of any
property or assets of any other Subsidiary existing on the Closing Date that are
used in any business or operations conducted in any jurisdiction other than the
United States, Mexico, the Dominican Republic and Europe; provided that any such
disposition shall not include property or
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assets owned by either Borrower or any Subsidiary Guarantor and used in any
business or operations conducted in the United States, Mexico, the Dominican
Republic or Europe.
SECTION 6.06. Restricted Payments. Declare or pay any dividend
(other than dividends payable solely in common stock of Parent or options,
warrants or other rights to purchase common stock of Parent) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of Parent that is not Indebtedness or
any warrants or options to purchase any such stock, whether now or hereafter
outstanding, or make any other distribution (other than dividends payable solely
in the common stock of Parent or options, warrants or other rights to purchase
common stock of Parent) in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Parent (such declarations,
payments, setting apart, purchases, redemptions, defeasance, retirements,
acquisitions and distributions being herein called "Restricted Payments"),
except that:
(a) either Borrower and any other Subsidiary may pay cash
dividends in an amount sufficient to allow Parent to pay, and Parent
may pay, its obligations to CD&R under any agreement with CD&R for the
rendering of management consulting or financial advisory services,
provided that such amount shall not exceed in the aggregate $1,000,000
per annum plus reasonable out-of-pocket expenses;
(b) Parent and any Subsidiary may, and may pay cash dividends
in an amount sufficient to allow Parent to and Parent may (i) purchase
or repurchase or otherwise acquire shares of the Capital Stock of an
Ultimate Parent or of Parent or rights, options or units in respect
thereof, from Management Investors, (ii) make loans, advances,
dividends or distributions to an Ultimate Parent to permit such
Ultimate Parent to make any such purchase, repurchase or other
acquisition, or (iii) purchase, repurchase or otherwise acquire Capital
Stock from an Ultimate Parent in connection with any Exercise for an
aggregate purchase price not to exceed $10,000,000 plus $2,000,000
multiplied by the number of calendar years that have commenced since
the Closing Date, provided that such amount shall be increased by an
amount equal to the proceeds of any resales or new issuances of shares
and options to any such Management Investors, at any time after the
initial issuances to any Management Investors, together with the
aggregate amount of deferred compensation owed by an Ultimate Parent,
Parent or any of its Subsidiaries to any such Management Investor that
shall thereafter have been canceled, waived or exchanged in connection
with the grant to such Management Investor of the right to receive or
acquire shares of an Ultimate Parent's, Parent's or any Subsidiary's
common stock plus the Net Proceeds received by Parent or any Subsidiary
since the Closing Date (including through receipt of proceeds from
the issuance or sale of its capital stock to, or as a capital
contribution from, an Ultimate Parent) (x) from the issuance or sale of
Management Investors of Capital Stock (including any options, warrants
or other rights in respect thereof) or (y) from an Ultimate Parent not
exceeding the amount of proceeds received by an Ultimate Parent from
the issuance or sale to Parent or any Subsidiary of Capital Stock or an
Ultimate Parent in connection with an Exercise;
(c) Parent and its Subsidiaries may enter into and consummate
the Transactions, and may pay cash dividends in an amount sufficient
(i) to allow Parent to, and Parent may, pay all fees and expenses
incurred in connection with the Transactions and perform its
obligations under or in connection with the
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Transactions and (ii) to permit Parent to pay its Guarantee on account
of interest on the New Notes and the New Note Documents, to the extent
that the payment of such Guarantee does not violate the subordination
provisions contained in the New Notes or the New Note Documents;
(d) Parent and any Subsidiary may make Permitted Ultimate
Parent Payments; and
(e) either Borrower and any other Subsidiary may pay cash
dividends in amounts sufficient to allow Parent to pay, and Parent may
pay, cash dividends up to an amount equal to 50% of Consolidated Net
Income (as defined in the indenture governing the New Notes as in
effect on the Closing Date) accrued during the period (treated as one
accounting period) from October 1, 2002 to the end of the most recent
fiscal quarter ending prior to the date of such dividend for which
consolidated financial statements of the Parent are available plus
$5,000,000, so long as on the date of such dividend by Parent, before
and after giving effect to such dividend, (i) the Term Loans shall have
been repaid in full, (ii) no Default or Event of Default shall have
occurred and be continuing or result therefrom, (iii) the Consolidated
Leverage Ratio shall be less than 3.0 to 1.0, and (iv) the Aggregate
Revolving Credit Exposure shall not be in excess of $25,000,000.
SECTION 6.07. Transactions with Affiliates. Enter into any
transaction, including any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate of Parent unless such transaction
(a) is otherwise permitted under this Agreement and (b) either (i) is upon terms
no less favorable to Parent, the applicable Borrower or its Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person that is not such an Affiliate, or (ii) has been approved by a majority
of the Disinterested Directors of Parent, or in the event that at the time of
any such transaction, there are no Disinterested Directors serving on the board
of directors or comparable body of Parent, such transaction shall be approved by
a nationally recognized expert with expertise in appraising the terms and
conditions of the type of transaction for which approval is required, provided
that nothing contained in this Section 6.07 shall be deemed to prohibit:
(i) Parent or any of its Subsidiaries from entering into or
performing any consulting, management or employment agreements or other
compensation arrangements with a director, officer or employee of an Ultimate
Parent, Parent or any of its Subsidiaries, provided that in the case of any such
agreement or arrangement with any director, such agreement or arrangement
provides for annual aggregate base compensation not in excess of $150,000 for
such director, in his capacity as such;
(ii) the Transactions and the payment of transaction expenses
in connection with this Agreement and the Transactions;
(iii) Parent or any of its Subsidiaries from entering into,
making payments pursuant to and otherwise performing an indemnification and
contribution agreement in favor of any of the Persons listed on Schedule
6.07(iii) and their Affiliates, any Management Investor and each Person who is
or becomes a director, officer, agent or employee of Parent or any of the
Subsidiaries, in respect of liabilities (A) arising under the Securities Act of
1933, the Securities Exchange Act of 1934 and any other applicable securities
laws or otherwise, in connection with any offering of securities by Parent or
any of the Subsidiaries, (B) incurred to third parties for any action or failure
to act of
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Parent or any of the Subsidiaries, predecessors or successors, (C)
arising out of the performance by CD&R of management consulting or financial
advisory services provided to Parent or any of the Subsidiaries, (D) arising out
of the fact that any indemnitee was or is a director, officer, agent or employee
of Parent or any of the Subsidiaries, or is or was serving at the request of any
such corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or enterprise or (E) to the
fullest extent permitted by Delaware or other applicable state law, arising out
of any breach or alleged breach by such indemnitee of his or her fiduciary duty
as a director or officer of Parent or any of the Subsidiaries;
(iv) Parent or any of the Subsidiaries from performing any
agreements or commitments with or to any Affiliate existing on the Closing Date
and described on Schedule 6.07(iv); or
(v) any transaction (including entering into and performing
any agreement with respect thereto) permitted under Section 6.01(d), 6.02(n),
6.03(e), 6.03(i), 6.03(k), 6.03(l), 6.03(p), 6.03(q), 6.04, 6.05(k), 6.06 or
6.08, or any transaction with a wholly owned Subsidiary of Parent.
For purposes of this Section 6.07, "Disinterested Director" shall mean, with
respect to any Person and transaction, a member of the board of directors or
comparable body of such Person who does not have any material direct or indirect
financial interest in or with respect to such transaction (other than by virtue
of such member's ownership of Capital Stock of an Ultimate Parent, Parent or any
Subsidiary of Parent).
SECTION 6.08. Business of Parent, Borrowers and Subsidiaries.
(a) Enter into any business, either directly or through any Subsidiary, except
for those businesses of the same general type as those in which Parent and the
Subsidiaries are engaged on the Closing Date or which are related thereto.
(b) In the case of Parent or any Foreign Subsidiary
Holdco, engage in any business or business activity other than (i) the
Transactions and other transactions contemplated by the Loan Documents and the
provision of administrative, legal, accounting and management services to or on
behalf of Parent or any of its Subsidiaries, (ii) holding the Capital Stock,
directly or indirectly, of the Borrowers or any Subsidiary (including any
Subsidiary formed or acquired after the Closing Date) and the issuance, sale or
transfer of Capital Stock of such Foreign Subsidiary Holdco or any Subsidiary to
Parent or any wholly owned Subsidiary thereof, and the exercise of rights and
the performance of obligations in connection therewith, (iii) the entry into,
and exercise of rights and performance of obligations in respect of, (A) the
Loan Documents and New Note Documents to which Parent or such Foreign Subsidiary
Holdco, as the case may be, is a party, and any other agreement to which Parent
or such Foreign Subsidiary Holdco, as the case may be, is a party on the date
hereof, in each case, as amended, supplemented, waived or otherwise modified
from time to time, and any refinancings, refundings, renewals or extensions
thereof, (B) contracts and agreements with officers, directors and employees of
Parent or such Foreign Subsidiary Holdco, as the case may be, or a Subsidiary
thereof relating to their employment or directorships, (C) insurance policies
and related contracts and agreements and (D) equity subscription agreements,
registration rights agreements, voting and other stockholder agreements,
engagement letters, underwriting agreements and other agreements in respect of
its equity securities or any offering, issuance or sale thereof, including but
not limited to in respect of Management Subscription Agreements, (iv) with
respect to Parent only, the offering, issuance and sale of its equity
securities, (v) with respect to Parent only, the filing of registration
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statements, and compliance with applicable reporting and other obligations,
under federal, state or other securities laws, (vi) with respect to Parent only,
the listing of its equity securities and compliance with applicable reporting
and other obligations in connection therewith, (vii) the retention of counsel,
accountants and other advisory and consultants, and, with respect to Parent
only, transfer agents, private placement agents and underwriters, (viii) the
performance of obligations under and compliance with its certificate of
incorporation and by-laws, or any applicable law, ordinance, regulation, rule,
order, judgment, decree or permit, (ix) the incurrence and payment of its
operating and business expenses and any taxes for which it may be liable, (x)
making loans to or other Investments in, or borrowing money from, other
Subsidiaries or Parent, (xi) owning Intellectual Property and foreign patents,
trademarks, trade names, copyrights, technology, know-how and processes and
licensing such Intellectual Property and foreign patents, trademarks, trade
names, copyrights, technology, know-how and processes to other subsidiaries of
Parent, (xii) paying dividends and other distributions on account of its Capital
Stock (to the extent permitted by Section 6.06), (xiii) transactions with an
Ultimate Parent permitted under Section 6.07, and (xiv) other activities
incidental or related to any of the foregoing.
SECTION 6.09. Negative Pledge Clauses. Enter into any
agreement which prohibits or limits the ability of Parent or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its property or revenues, whether now owned or hereafter acquired, to secure the
Obligations or, in the case of any Guarantor, its Obligations under the
applicable Guarantee Agreement, other than (a) this Agreement and the other Loan
Documents and any related documents, (b) any industrial revenue or development
bonds, agreements governing any purchase money Liens, acquisition agreements or
Financing Leases or operating leases of real property entered into in the
ordinary course of business otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective against the assets financed,
acquired or leased thereby) or (c) as otherwise permitted by any Security
Document.
SECTION 6.10. Optional Payments and Modifications of Debt
Instruments and other Material Agreements. (a) Except as otherwise provided
below, make any optional payment, prepayment, repurchase or redemption of the
New Notes or make any optional payments on account of or for a sinking or other
analogous fund for the repurchase, redemption, defeasance or other acquisition
thereof (other than mandatory payments of principal and interest and payments
of, in each case, fees and expenses required by the New Notes or the New Note
Documents, only to the extent permitted under the subordination provisions, if
any, applicable thereto), (b) make any amendment, supplement, modification or
waiver of any of the terms of the New Notes or the New Note Documents (i) which
amends or modifies the subordination provisions contained in the New Notes and
the New Note Documents; (ii) which shortens the fixed maturity or increases the
principal amount of, or increases the rate or shortens the time of payment of
interest on, or increases the amount or shortens the time of payment of any
principal or premium payable whether at maturity, at a date fixed for prepayment
or by acceleration or otherwise of the Indebtedness evidenced by the New Notes
or increases the amount of, or accelerates the time of payment of, any fees or
other amounts payable in connection therewith to any holder of the New Notes;
(iii) which relates to any material affirmative or negative covenants or any
events of default or remedies thereunder and the effect of which is to subject
Parent or any Subsidiary to any more onerous or more restrictive provisions; or
(iv) which otherwise adversely affects the interests of the Lenders as senior
creditors with respect to the New Notes or the interests of the Lenders
hereunder in any material respect or (c) in the event of the occurrence of a
Change in Control, repurchase the New Notes, unless the Borrowers shall have (i)
made payment in full of the Loans, all
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L/C Disbursements and any other amounts then due and owing to any Secured Party
hereunder and cash collateralized the obligations of the Borrowers in respect of
Letters of Credit on terms reasonably satisfactory to the Administrative Agent
and Issuing Bank or (ii) made an offer to pay the Loans, all L/C Disbursements
and any amounts then due and owing to each Secured Party hereunder and to cash
collateralize the obligations of the Borrowers in respect of Letters of Credit
in respect of each Lender and shall have made payment in full thereof to each
such Lender or the Administrative Agent which has accepted such offer and cash
collateralized such obligations in respect of Letters of Credit of each such
Issuing Bank which has accepted such offer. Notwithstanding the foregoing,
Borrowers may prepay, redeem, repurchase, defease, acquire or otherwise retire
New Notes, in whole or in part, so long as on the date of such prepayment,
redemption, repurchase, defeasance, acquisition or other retirement, before and
after giving effect thereto, (v) no Default or Event of Default shall have
occurred and be continuing or result therefrom, (w) the Consolidated Leverage
Ratio shall be less than 3.0 to 1.0, and (x) the Term Loans shall have been
repaid in full. For the avoidance of doubt, this Section 6.10 shall not be
construed to prohibit or restrict (y) the making or consummation of an exchange
offer whereby New Notes registered with the U.S. Securities and Exchange
Commission are issued in exchange for New Notes not so registered or (z) the
provision of Guarantees of New Notes as permitted by Section 6.01(d), including
by way of amendment or supplement to any New Note Document.
SECTION 6.11. Capital Expenditures. Make any expenditure (a
"Capital Expenditure") in respect of the purchase or other acquisition of fixed
or capital assets (excluding (i) any such asset acquired in connection with
normal replacement and maintenance programs properly charged to current
operations and (ii) any Permitted Acquisition permitted by Section 6.03(n))
except for (x) Capital Expenditures described in the immediately preceding
parenthetical and (y) additional Capital Expenditures, in the case of this
clause (y) not exceeding, in the aggregate for Parent and its Subsidiaries,
during any fiscal year of Parent the amount set forth below opposite such fiscal
year:
Fiscal Year Amount
----------- ------
2003 $ 15,000,000
2004 13,000,000
2005 13,000,000
2006 13,000,000
2007 13,000,000
; provided that any portion of such amount which is not so expended in the
fiscal year for which it is permitted above may be carried over to increase the
amount permitted for the next fiscal year of Parent and shall be deemed to be
the first amounts expended in such next fiscal year; provided, however, that
none of the amounts set forth in the table above shall be increased by more than
50% of such amount by virtue of any such carry-over.
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SECTION 6.12. Consolidated Leverage Ratio. Permit the
Consolidated Leverage Ratio on the last day of any fiscal quarter of Parent
ending during any period set forth below to be in excess of the ratio set forth
below for such period:
Period Ratio
------ -----
Closing Date - September 30, 2004 4.25 to 1.00
October 1, 2004 - September 30, 2005 4.00 to 1.00
October 1, 2005 - September 30, 2006 3.75 to 1.00
October 1, 2006 - September 30, 2007 3.25 to 1.00
October 1, 2007 - Thereafter 3.00 to 1.00
SECTION 6.13. Consolidated Interest Coverage Ratio. Permit,
for any period of four consecutive fiscal quarters of Parent ending during any
period set forth below, the Consolidated Interest Coverage Ratio at the last day
of such four fiscal quarter period to be less than the ratio set forth below
opposite such period:
Period Ratio
------ -----
Closing Date - September 30, 2004 2.15 to 1.00
October 1, 2004 - September 30, 2005 2.25 to 1.00
October 1, 2005 - September 30, 2006 2.50 to 1.00
October 1, 2006 - September 30, 2007 2.75 to 1.00
October 1, 2007 - Thereafter 3.00 to 1.00
SECTION 6.14. Fiscal Year. Permit the fiscal year of Parent to
end on a day other than December 31.
ARTICLE VII
Events of Default
SECTION 7.01. Certain Bankruptcy Events. If any of the
following events shall occur and be continuing:
(a) Parent, either Borrower or any Material Subsidiary shall
commence any case, proceeding or other action (i) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, concurso mercantil, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (ii) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or Parent, either Borrower or any
Material Subsidiaries shall make a general assignment for the benefit
of its creditors;
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(b) there shall be commenced against Parent, either Borrower
or any Material Subsidiary any case, proceeding or other action of a
nature referred to in clause (a) above which (i) results in the entry
of an order for relief or any such adjudication or appointment or (ii)
remains undismissed, undischarged or unbonded for a period of 60 days;
(c) there shall be commenced against Parent, either Borrower
or any Material Subsidiary any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof;
(d) Parent, either Borrower or any Material Subsidiary shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(a), (b) or (c) above; or
(e) Parent, either Borrower or any Material Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
then, and in any such event:
(A) if such event is an Event of Default specified in clause
(a) or (b) of this Section 7.01 with respect to Parent or either
Borrower, the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including all amounts of obligations under
Letters of Credit, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable; and
(B) if such event is any other Event of Default specified in
this Section 7.01, any or all of the following actions may be taken:
(i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative
Agent shall, by notice to the Borrowers, declare the Commitments to be
terminated forthwith, whereupon the Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders,
the Administrative Agent shall, by notice to the Borrowers, declare the
Loans hereunder (with accrued interest thereon) and all other amounts
owing on account thereof under this Agreement (including all amounts
due in respect of Letters of Credit, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be due and payable forthwith,
whereupon the same shall immediately become due and payable.
SECTION 7.02. Other Events of Default. If any of the following
events shall occur and be continuing:
(a) either Borrower shall fail to pay in the applicable
currency any principal of any Loan or the reimbursement obligation with
respect to any L/C Disbursement when due in accordance with the terms
thereof or hereof (it being understood that any conversion of a
reimbursement obligation under a Letter of
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Credit into a borrowing pursuant to Section 2.22(e) shall not
constitute a failure to make a payment in satisfaction of such
reimbursement obligation) or either Borrower shall fail to pay in the
applicable currency any interest on any Loan, or any other amount
payable, within five days after any such interest or other amount
becomes due in accordance with the terms thereof or hereof;
(b) any representation or warranty made or deemed made by
either Borrower or any other Loan Party herein or in any other Loan
Document or that is contained in any certificate furnished by it at any
time under or pursuant to this Agreement or any such other Loan
Document shall prove to have been incorrect in any material respect on
or as of the date deemed made;
(c) Parent, either Borrower or any Subsidiary shall default in
the observance or performance of any agreement contained in Article VI
or Section 4.07, 4.08, 4.09 or 4.10 of the U.S. Security Agreement;
(d) either Borrower or any other Loan Party shall default in
the observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section 7.02), and such default
shall continue unremedied for a period ending on the earlier of (i) the
date 30 days after a Responsible Officer of Parent or either Borrower
shall have discovered or should have discovered such default and (ii)
the date 15 days after written notice has been given to the Borrowers
by the Administrative Agent;
(e) Parent, either Borrower or any of the Borrowers'
Subsidiaries shall (i) default in any payment in the applicable
currency of principal of or interest on any Material Indebtedness
(other than the Loans and the reimbursement obligations under the
Letters of Credit), beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or
(ii) default in the observance or performance of any other agreement or
condition relating to any such Material Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the
holder or holders of such Material Indebtedness (or a trustee or
Administrative Agent on behalf of such holder or holders) to cause,
with the giving of notice or lapse of time if required, such Material
Indebtedness to become due prior to its stated maturity (an
"Acceleration"), and such time shall have lapsed and, if any notice (a
"Default Notice") shall be required to commence a grace period or
declare the occurrence of an Event of Default before notice of
Acceleration may be delivered, such Default Notice shall have been
given;
(f) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of Parent, either Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is reasonably likely to result in the
termination of such Plan for purposes of Title IV
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of ERISA (other than a standard termination pursuant to Section 4041(b)
of ERISA), (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, (v) Parent, either Borrower or any Commonly
Controlled Entity shall, or is reasonably likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan, (vi) the occurrence or
expected occurrence of any event or condition which results or is
reasonably likely to result in Parent, either Borrower or any Commonly
Controlled Entity becoming responsible for any liability in respect of
a Former Plan, (vii) with respect to any Foreign Benefit Plans, any
material noncompliance with applicable foreign law or the incurrence of
any material liability, or (viii) any other event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (viii) above, such event or condition, together with all other
such events or conditions, if any, would be reasonably expected to
result in liability which would have a Material Adverse Effect;
(g) one or more judgments or decrees shall be entered against
Parent, either Borrower or any of its Active Subsidiaries involving in
the aggregate a liability (net of any insurance or indemnity payments
actually received in respect thereof prior to or within 60 days from
the entry thereof, or to be received in respect thereof, in the event
any appeal thereof shall be unsuccessful) of $5,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 60 days from the entry thereof;
(h) (i) any of the Security Documents or Guarantee Agreements
shall cease, for any reason, to be in full force and effect other than
pursuant to the terms hereof or thereof, or Parent, either Borrower or
any other Loan Party which is a party to any of the Security Documents
or Guarantee Agreements shall so assert in writing or (ii) the Lien
created by any of the Security Documents shall cease to be enforceable
and of the same effect as to perfection and priority purported to be
created thereby with respect to any significant portion of the
Collateral (other than in connection with any termination of such Lien
in respect of any Collateral as permitted hereby or by any Security
Document), and such failure of such Lien to be perfected and
enforceable with such priority shall have continued unremedied for a
period of 20 days;
(i) the New Notes, for any reason, shall not be or shall cease
to be validly subordinated as provided therein and in the New Note
Documents to the obligations of any Loan Party under this Agreement and
the other Loan Documents; or
(j) a Change in Control shall have occurred;
then, and in any such event, either or both of the following actions may be
taken:
(i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders,
the Administrative Agent shall, by notice to the Borrowers, declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and
(ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders,
the Administrative Agent shall, by notice to the Borrowers, declare the
Loans hereunder (with accrued interest
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thereon) and all other amounts owing on account thereof under this
Agreement (including all amounts due in respect of Letters of Credit,
whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) to be
due and payable forthwith, whereupon the same shall immediately become
due and payable.
ARTICLE VIII
The Administrative Agent and the Collateral Agent
SECTION 8.01. Appointment. Each of the Lenders and the Issuing
Bank hereby irrevocably designates and appoints each of the Administrative Agent
and the Collateral Agent (for purposes of this Article VIII, the Administrative
Agent and the Collateral Agent are referred to collectively as the "Agents") as
the agents of such Lender under this Agreement and the other Loan Documents, and
each such Lender irrevocably authorizes the Agents to take such action on behalf
of such Lender or the Issuing Bank under the provisions of this Agreement and
the other Loan Documents and to exercise such powers and perform such duties as
are expressly delegated to the Agents by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Agents shall not have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agents. The Administrative Agent is hereby expressly
authorized by the Lenders and the Issuing Bank, without hereby limiting any
implied authority, (a) to receive on behalf of the Lenders and the Issuing Bank
all payments of principal of and interest on the Loans, all payments in respect
of L/C Disbursements and all other amounts due to the Lenders and the Issuing
Bank hereunder, and promptly to distribute to each Lender or the Issuing Bank
its proper share of each payment so received, (b) to give notice on behalf of
each of the Lenders to the Borrowers of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder, and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by the
Borrowers or any other Loan Party pursuant to this Agreement or the other Loan
Documents as received by the Administrative Agent. Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents.
SECTION 8.02. Delegation of Duties. Each of the Agents may
execute any and all of their respective duties under this Agreement and the
other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to the advice of counsel concerning all matters pertaining to such
duties. Neither Agent shall be responsible for the negligence or misconduct of
any agent or attorney-in-fact selected by it with reasonable care.
SECTION 8.03. Exculpatory Provisions. Neither Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such
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Person's own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by Parent, either Borrower or any officer thereof contained in
this Agreement or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in, or received by,
either Agent under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of Parent or either Borrower to perform its obligations hereunder or thereunder.
Neither Agent shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of Parent, either Borrower or any other Loan
Party.
SECTION 8.04. Reliance by Agents. Each Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
Parent or either Borrower), independent accountants and other experts selected
by the Administrative Agent. Each Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. Each Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or such larger number of Lenders as may be explicitly required
hereunder), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.
SECTION 8.05. Notice of Default. The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any Default
or Event of Default hereunder unless the Administrative Agent has received
notice from a Lender, Parent or either Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders,
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
SECTION 8.06. Acknowledgments and Representations by Lenders.
Each Lender expressly acknowledges that neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by either Agent hereinafter
taken, including any review of the affairs of Parent or either Borrower, shall
be deemed to constitute any representation or warranty by such Agent to any
Lender. Each Lender represents to each other party hereto that it has,
independently and without reliance upon the Agents or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
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financial and other condition and creditworthiness of Parent and the Borrowers
and made its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents to each other party hereto that it will,
independently and without reliance upon either Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of Parent and the Borrowers. Each Lender represents to each
other party hereto that it is a bank, savings and loan association or other
similar savings institution, insurance company, investment fund or company or
other financial institution that makes or acquires commercial loans in the
ordinary course of its business, that it is participating hereunder as a Lender
for such commercial purposes, and that it has the knowledge and experience to be
and is capable of evaluating the merits and risks of being a Lender hereunder.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
Parent or either Borrower which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
SECTION 8.07. Expense Reimbursement; Indemnification. Each
Lender agrees (a) to reimburse the Agents, on demand, in the amount of its pro
rata share (based on its Commitments hereunder) of any expenses incurred for the
benefit of the Lenders by the Agents, including counsel fees and compensation of
agents and employees paid for services rendered on behalf of the Lenders, that
shall not have been reimbursed by the Borrowers and (b) to indemnify and hold
harmless each Agent and any of its directors, officers, employees or agents, on
demand, in the amount of such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by or asserted against it in its capacity as Agent
or any of them in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted by it or any of them under
this Agreement or any other Loan Document, to the extent the same shall not have
been reimbursed by the Borrowers or any other Loan Party, provided that no
Lender shall be liable to an Agent or any such other indemnified Person for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements as are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Agent or any of its
directors, officers, employees or agents. Each Revolving Credit Lender agrees to
reimburse each of the Issuing Bank and its directors, employees and agents, in
each case, to the same extent and subject to the same limitations as provided
above for the Agents.
SECTION 8.08. Agents in their Individual Capacities. Each of
the Agents and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with Parent, either Borrower or any
Subsidiary or Affiliate thereof as though such Agent were not an Agent hereunder
and under the other Loan Documents. With respect to the Loans made by it, each
of the Agents shall have the same rights and powers under this Agreement and the
other Loan Documents as any Lender and may exercise the same as though it were
not such Agent and the terms "Lender" and "Lenders" shall include each of the
Agents in its respective individual capacity.
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SECTION 8.09. Successor Agents. (a) Subject to the appointment
and acceptance of a successor Agent as provided below, the Administrative Agent
may resign upon ten days' notice to the Lenders by notifying the Lenders and the
Borrowers. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Agent (provided that, to the extent that no Default or
Event of Default is continuing at the time of such appointment, such Agent shall
have been approved by the Borrowers). If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent
which shall be a Lender and be a bank with an office in New York, New York,
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as the Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder. After an Agent's
resignation hereunder, the provisions of this Article and Section 9.06 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent. Without the consent of the
Borrowers, the Administrative Agent and the Collateral Agent may not be
different Persons.
(b) Upon appointment of the retiring Collateral Agent
(the "Retiring Collateral Agent"), such Retiring Collateral Agent shall promptly
(i) deliver to the new Collateral Agent all Collateral held by such Retiring
Collateral Agent, (ii) execute and file uniform commercial code financing
statements, naming the new Collateral Agent as assignee, in each jurisdiction
financing statements have been filed in connection with any Loan Document, (iii)
take all such actions required or requested by either Borrower to name the new
Collateral Agent as mortgagee under the Mortgages and (iv) take all such other
actions required or requested by either Borrower to perfect the pledge or lien
pursuant to the Security Documents in the name of the new Collateral Agent.
ARTICLE IX
Miscellaneous
SECTION 9.01. Amendments and Waivers. (a) Neither this
Agreement nor any other Loan Document, nor any terms hereof or thereof may be
waived, amended, supplemented or modified except in accordance with the
provisions of this Section 9.01.
(b) Except as set forth in the succeeding paragraphs of
this Section 9.01, the Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (i) enter
into with the Loan Parties written amendments, supplements or modifications
hereto and to the other Loan Documents for the purpose of adding any provisions
to this Agreement or the other Loan Documents or changing in any manner the
rights of the Lenders or of the Loan Parties hereunder or thereunder or (ii)
waive at any Loan Party's request on such terms and conditions as the Required
Lenders or the Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences (any such
amendment, supplement, modification or waiver, a "Specified Change"); provided,
however, that (x) without the written consent of the Issuing Bank, no Specified
Change shall amend, supplement or otherwise modify any provisions of or directly
applicable to any Letter of Credit, (y) without the written consent of the
Swingline Lender, no
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Specified Change shall amend, modify or waive any provision of Section 2.23 or
any other provision of this Agreement governing the rights or obligations of the
Swingline Lender, and (z) without the written consent of the then Administrative
Agent and Collateral Agent, no Specified Change shall amend, modify or waive any
provision of Article VIII, or, without the prior written consent of the then
Administrative or the then Collateral Agent, as applicable, no Specified Change
shall amend, modify or waive any other provision of this Agreement governing the
rights or obligations of the Administrative Agent or the Collateral Agent.
(c) Without the written consent of the Required Lenders,
no Specified Change shall (i) waive any of the conditions precedent to the
funding of the initial Loans and extensions of credit set forth in Section 4.02
(except that the making of the initial extensions of credit by any Lender on the
Closing Date shall be deemed to constitute a waiver of such conditions precedent
by such Lender), (ii) waive any Default or Event of Default under Section 7.01
and its consequences or (iii) amend, supplement or otherwise modify any
provisions of Section 7.01.
(d) Without the written consent of the Collateral Release
Lenders, no Specified Change shall take any action which has the effect of
releasing all or substantially all of the Collateral, Parent or either Borrower
from its Guarantee or all or substantially all of the Subsidiary Guarantors from
their Guarantees in respect hereof (except as permitted hereby or by any
Security Document).
(e) Without the written consent of each Lender directly
affected thereby, no Specified Change shall (i) reduce the amount or extend the
scheduled date of maturity of any Loan or of any installment thereof, (ii)
reduce the stated rate of any interest or fee payable or extend the scheduled
date of any payment thereof, (iii) increase the amount or extend the expiration
date of any Lender's Commitments or (iv) amend, modify or waive any provision of
this Section 9.01.
(f) Without the written consent of all the Lenders, no
Specified Change shall amend or modify the pro rata requirements of Section 2.17
or reduce the percentage specified in the definition of "Required Lenders".
(g) Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Lenders, the Administrative Agent, all future holders of the Loans and
the Loan Parties signatories thereto. In the case of any waiver, each of the
Loan Parties, the Lenders and the Administrative Agent shall be restored to
their former positions and rights hereunder and under the other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
SECTION 9.02. Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by facsimile transmission) and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) in the case of
delivery by hand, when delivered, (b) in the case of delivery by mail, three
days after being deposited in the mails, first class postage prepaid, (c) in the
case of delivery by a nationally recognized overnight courier, when received, or
(d) in the case of delivery by facsimile transmission, when sent and receipt has
been confirmed, addressed as follows in the case of Parent, either Borrower, the
Administrative Agent, the Collateral Agent or the Issuing Bank, and in the case
of a Lender, to it at its address (or facsimile number) set forth on Schedule
2.01 or in the
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Assignment and Acceptance pursuant to which such Lender shall have become a
party hereto, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Loans:
Parent, JCI and DCJ: c/o Jafra Cosmetics International, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
Facsimile: (000) 000 0000
Telephone: (000) 000-0000
In the case of notices Debevoise & Xxxxxxxx
to Parent, JCI or DCJ, 000 Xxxxx Xxxxxx
with a copy to: Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Administrative Agent, Credit Suisse First Boston
Collateral Agent and Eleven Madison Avenue
Issuing Bank: Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx XxXxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the
Administrative Agent or the Lenders pursuant to Section 2.03, 2.09(c),
2.10, 2.12(a), 2.17, 2.22(b) or 2.23(b), shall not be effective until
received.
SECTION 9.03. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Administrative Agent,
the Issuing Bank, any Lender or any Loan Party, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 9.04. Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any certificate delivered pursuant hereto or in connection herewith shall
survive the execution and delivery of this Agreement and the making of the Loans
hereunder.
SECTION 9.05. Successors and Assigns. (a) This Agreement shall
be binding upon and inure to the benefit of Parent, each Borrower, the Lenders,
the Issuing Bank, the Collateral Agent, the Administrative Agent, and their
respective successors and assigns, except that neither Parent nor either
Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender except as expressly
provided in this Agreement and any attempted assignment without such consent
shall be null and void.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell to one or more banks or
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other entities ("Participants") participating interests in any Loan owing to
such Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Loan Documents, provided that (unless the
Borrowers, the Administrative Agent and, in the case of any assignment of a
Revolving Credit Commitment, the Issuing Bank and the Swingline Lender otherwise
consent in writing) no such participating interests shall be in an aggregate
principal amount of less than $1,000,000 in the aggregate (or, if less, the full
amount of such selling Lender's Loans and Commitments). In the event of any such
sale by a Lender of a participating interest to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the Loan
Parties, the Administrative Agent, the Issuing Bank and the Collateral Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. Any agreement pursuant to which any Lender shall sell any such
participating interest shall provide that such Lender shall retain the sole
right and responsibility to exercise such Lender's rights and enforce Parent's
and each Borrower's respective obligations hereunder, including the right to
consent to any amendment, supplement, modification or waiver of any provision of
this Agreement or any of the other Loan Documents, and no Lender shall be
entitled to create in favor of any Participant, in the participation agreement
pursuant to which such Participant's participating interest shall be created or
otherwise, any right to vote on, consent to or approve any matter relating to
this Agreement or any other Loan Document, provided that such participation
agreement may provide that, without the consent of the Participant, such Lender
will not agree to any amendment, supplement, modification or waiver, specified
in Section 9.01(e) or (f). The Borrowers also agree that each Lender shall be
entitled to the benefits of Sections 2.14, 2.16 and 2.20 without regard to
whether it has granted any participating interests, and that all amounts payable
to a Lender under Sections 2.14, 2.16 and 2.20 shall be determined as if such
Lender had not granted any such participating interests.
(c) Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from time to
time assign to (i) any Lender or any Affiliate thereof (except in the case of an
assignment of a Revolving Credit Commitment, which assignment shall require the
prior written consent of the Issuing Bank and the Swingline Lender, which
consent, in each case, shall not be unreasonably withheld) or (ii) with the
prior written consent of the Administrative Agent and the Borrowers (and, in the
case of any assignment of a Revolving Credit Commitment, the Issuing Bank and
the Swingline Lender) (which, in each case, shall not be unreasonably withheld),
to any additional bank, financial institution or institutional entity (any such
assignee described in clause (i) or (ii), an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance executed by such Assignee, such
assigning Lender and the Administrative Agent (and, to the extent required
pursuant to clauses (i) and (ii) above, by the Borrowers, the Swingline Lender
and the Issuing Bank) and delivered to the Administrative Agent for its
acceptance and recording in the Register (as defined below), provided that (x)
unless the Borrowers, the Administrative Agent and, in the case of any
assignment of a Revolving Credit Commitment, the Issuing Bank and the Swingline
Lender otherwise consent in writing, no such assignment shall be in an aggregate
principal amount of less than $1,000,000 in the aggregate (or, if less, the full
amount of such selling Lender's Loans and Commitments) and (y) if any Lender
assigns all or any part of its rights and obligations under this Agreement to
one of its Affiliates in connection with or in contemplation of the sale or
other disposition of its interest in such
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Affiliate, the Borrowers' prior written consent shall be required for such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning Lender
shall cease to be a party hereto). Notwithstanding the foregoing, no Assignee,
which as of the date of any assignment to it pursuant to this Section 9.05(c)
would be entitled to receive any greater payment under Section 2.14 or 2.20 than
the assigning Lender would have been entitled to receive as of such date under
such Sections with respect to the rights assigned, shall be entitled to receive
such payments unless the Borrowers have consented in writing to the assignment
and agreed in writing to waive the benefit of this sentence.
(d) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder shall be
deemed to confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse claim
and that its Term Loan Commitment and Revolving Credit Commitment, and the
outstanding balances of its Term Loans and Revolving Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of either Borrower or any Subsidiary or the
performance or observance by either Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such Assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such Assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 3.01(b) or delivered pursuant to Section 5.01 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
Assignee confirms the Lender acknowledgements and representations set forth in
Section 8.06; (vi) such Assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such Assignee agrees
that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender. The
Assigning Lender and Assignee that are parties to each such assignment shall (A)
electronically execute and deliver to the Administrative Agent an Assignment and
Acceptance via an electronic settlement system acceptable to the Administrative
Agent (which initially shall be ClearPar, LLC) or (B) manually execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500.
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(e) The Administrative Agent, on behalf of the Borrowers,
shall maintain at the address of the Administrative Agent referred to in Section
9.02 a copy of each Assignment and Acceptance delivered to it and a register
(the "Register") for the recordation of the names and addresses of the Lenders
and the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive and the
Borrowers, the Administrative Agent, the Issuing Bank, the Collateral Agent and
the Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrowers, the Collateral
Agent or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(f) Upon its receipt of (i) an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an Affiliate thereof, by the Borrowers, the
Administrative Agent, the Issuing Bank or the Swingline Lender, as applicable),
(ii) a duly completed Administrative Questionnaire, (iii) payment to the
Administrative Agent of a registration and processing fee of $3,500 (if required
by the last sentence of Section 9.05(d)) and (iv) all necessary written consents
to such assignment, the Administrative Agent shall (x) promptly accept such
Assignment and Acceptance, (y) on the effective date determined pursuant thereto
record the information contained therein in the Register and (z) give notice of
such acceptance and recordation to the Borrowers. On or prior to such effective
date, the assigning Lender shall surrender any outstanding Notes held by it all
or a portion of which are being assigned, and the Borrowers, at their own
expense, shall, upon the request to the Administrative Agent made at the time of
such assignment by the assigning Lender or the Assignee, as applicable, execute
and deliver to the Administrative Agent (in exchange for the outstanding Notes
of the assigning Lender) a new Note to the order of such Assignee in an amount
equal to (i) in the case of an assigned Revolving Loan, the lesser of (A) the
amount of such Assignee's Revolving Credit Commitment and (B) the aggregate
principal amount of all Revolving Loans made by such Assignee and (ii) in the
case of an assigned Term Loan, the amount of such Assignee's Term Loan, in each
case with respect to the relevant Loan after giving effect to such Assignment
and Acceptance and, if the assigning Lender has retained a Loan hereunder, a new
Note, as the case may be, to the order of the assigning Lender in an amount
equal to (i) in the case of a retained Revolving Credit Loan, the lesser of (A)
the amount of such Lender's Revolving Credit Commitment and (B) the aggregate
principal amount of all Revolving Loans made by such Lender and (ii) in the case
of a retained Term Loan, the amount of such Lender's Term Loan, in each case
with respect to the relevant Loan after giving effect to such Assignment and
Acceptance. Any such new Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note replaced thereby. Any Notes surrendered by
the assigning Lender shall be returned by the Administrative Agent to the
applicable Borrower marked "canceled".
(g) Each Borrower authorizes each Lender to disclose to
any Participant or Assignee (each, a "Transferee") and any prospective
Transferee, subject to the provisions of Section 9.17, any and all financial
information in such Lender's possession concerning the Borrowers and their
Affiliates which has been delivered to such Lender by or on behalf of the
Borrowers pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrowers in connection with such
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Lender's credit evaluation of the Borrowers and their Affiliates prior to
becoming a party to this Agreement. No assignment or participation made or
purported to be made to any Transferee shall be effective without the prior
written consent of the Borrowers if it would require the Borrowers to make any
filing with any Governmental Authority or qualify any Loan or Note under the
laws of any jurisdiction, and the Borrowers shall be entitled to request and
receive such information and assurances as it may reasonably request from any
Lender or any Transferee to determine whether any such filing or qualification
is required or whether any assignment or participation is otherwise in
accordance with applicable law.
(h) Any Lender may (without the consent of the Borrower
or the Administrative Agent) at any time assign all or any portion of its rights
under this Agreement to secure extensions of credit to such Lender or in support
of obligations owed by such Lender (including, if such Lender is a fund that
invests in bank loans, to a trustee for holders of obligations owed, or
securities issued, by such fund); provided that no such assignment shall release
a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto and any foreclosure or exercise of remedies by
such assignee or trustee shall be subject to the provisions of this Section 9.05
regarding assignments in all respects.
(i) Notwithstanding anything to the contrary contained
herein, any Lender (a "Granting Lender") may grant to a special purpose funding
vehicle administered by such Granting Lender or an Affiliate thereof (an "SPC"),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrowers, the option to provide to the Borrowers
all or any part of any Loan that such Granting Lender would otherwise be
obligated to make to the Borrowers pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to make any Loan, (ii)
if an SPC elects not to exercise such option or otherwise fails to provide all
or any part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof, (iii) the Granting Lender (and not the SPC)
shall have the sole right and responsibility to deliver all consents and waivers
required or requested under this Agreement with respect to its SPC, and (iv) no
SPC shall (A) be entitled to receive any greater amount pursuant to any
provision of this Agreement, including without limitation subsection 2.14, 2.16,
2.20 or 9.06, than the Granting Lender would have been entitled to receive in
respect of the extensions of credit made by such SPC if such Granting Lender had
not designated such SPC hereunder, (B) be deemed to have any Term Loan
Commitment or Revolving Credit Commitment or (C) be designated if such
designation would otherwise increase the costs of the Commitments or the Loans
to either Borrower. The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender. Each party hereto hereby agrees that no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement
(all liability for which shall remain with the Granting Lender). In furtherance
of the foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year and
one day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof; provided, however, that each Granting Lender
designating any SPC hereby agrees to indemnify, save and hold harmless each
other party hereto for any loss, cost, damage or expense arising out of its
inability to institute such a proceeding against such SPC during such period of
forbearance. The indemnification obligations of each Granting Lender under this
Section 9.05(i) shall survive the
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termination of this Agreement and the payment of the Loans and all other amounts
payable under this Agreement. In addition, notwithstanding anything to the
contrary contained in this Section 9.05, any SPC may with notice to, but without
the prior written consent of, the Borrowers and the Administrative Agent and
without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to the Granting Lender.
SECTION 9.06. Payment of Expenses and Taxes. Each Borrower
agrees (a) to pay or reimburse each of the Administrative Agent, the Collateral
Agent, the Lead Arrangers and the Issuing Bank for all reasonable out-of-pocket
costs and expenses incurred in connection with the preparation and execution of,
and any amendment, supplement, modification to, or waiver of the provisions of,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of one firm of counsel in each relevant jurisdiction to the
Administrative Agent, the Collateral Agent and the Lead Arrangers, (b) to pay or
reimburse each Lender, the Administrative Agent, the Collateral Agent and each
Lead Arranger for all its reasonable costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the
other Loan Documents and any such other documents, including the reasonable fees
and disbursements of any local counsel to the Administrative Agent, the
Collateral Agent, the Lead Arrangers and the several Lenders, (c) to pay,
indemnify and hold each Lender, the Collateral Agent, the Issuing Bank, the Lead
Arrangers and the Administrative Agent (each such Person being called an
"Indemnitee") harmless from, any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents and (d)
except as provided in Section 8.09(b), to pay, indemnify and hold each
Indemnitee harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents or the use of the proceeds of
the Loans and other extensions of credit hereunder, including any of the
foregoing relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to the operations of either Borrower, any of
the Subsidiaries or any of the Properties (all the foregoing in this clause (d)
collectively the "Indemnified Liabilities"), provided that Borrowers shall have
no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities arising from (i) the gross negligence or willful misconduct of any
Indemnitee (or any of their respective directors, trustees, officers, employees,
agents, successors and assigns) or (ii) claims made or legal proceedings
commenced against any Indemnitee by any securityholder or creditor thereof
arising out of and based upon rights afforded any such securityholder or
creditor solely in its capacity as such. Notwithstanding the foregoing, except
as provided in clauses (b) and (c) above, the Borrowers shall have no obligation
under this Section 9.06 to any Indemnitee with respect to any tax, levy, impost,
duty, charge, fee, deduction or withholding imposed, levied, collected, withheld
or assessed by any Governmental Authority.
The agreements in this Section 9.06 shall survive repayment of
the Loans and all other amounts payable hereunder.
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SECTION 9.07. Set-off. In addition to any rights and remedies
of the Lenders provided by law, each Lender shall have the right, without prior
notice to Parent and the Borrowers (any such notice being expressly waived by
the Borrowers to the extent permitted by applicable law), upon the occurrence of
an Event of Default under Section 7.02(a) to set off and appropriate and apply
against any amount then due and payable any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of either Borrower. Each Lender agrees promptly to notify Parent, the
Borrowers and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
SECTION 9.08. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan or participation in any L/C Disbursement, together with all fees,
charges and other amounts which are treated as interest on such Loan or
participation in such L/C Disbursement under applicable law (collectively the
"Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan or participation in accordance with applicable law, the rate of
interest payable in respect of such Loan or participation hereunder, together
with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan or participation but were not payable as a
result of the operation of this Section 9.08 shall be cumulated and the interest
and Charges payable to such Lender in respect of other Loans or participations
or periods shall be increased (but not above the Maximum Rate therefor) until
such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such
Lender.
SECTION 9.09. Counterparts. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts (including by facsimile transmission), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be delivered to
Parent, the Borrowers and the Administrative Agent.
SECTION 9.10. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 9.11. Integration. This Agreement, the other Loan
Documents and the Fee Letter represent the agreement among the parties with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by any of the parties hereto relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents or in the Fee Letter.
SECTION 9.12. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
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SECTION 9.13. Applicable Law. THIS AGREEMENT AND ANY NOTES AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY NOTES
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF
CONFLICTS OF LAWS TO THE EXTENT THAT THE SAME ARE NOT MANDATORILY APPLICABLE BY
STATUTE AND THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 9.14. Submission to Jurisdiction; Waivers. (a) Each
party hereto hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents (other than
the Mexican Security Documents) to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate courts of
any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient forum and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to (x)
Parent, JCI or the applicable Lender at its address set forth in Section 9.02 or
at such other address of which the Administrative Agent, any such Lender, Parent
and the Borrowers shall have been notified pursuant thereto; and (y) DCJ, (x) in
the case of any action or proceeding brought in the courts of the State of New
York, the courts of the United States of America for the Southern District of
New York, and appellate courts of any thereof, in care of the Process Agent at
the Process Agent's address set forth in paragraph (b) below, and (y) in the
case of any action or proceeding brought in the courts of Mexico, to Xxxxxxxxx
X. Xxxxx Xxxxxxx Xx. 000, Xxxxxxx Xxxxxxxx, Xxxxxx D.F. C.P. 010140, Attn:
Director General;
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section 9.14 any punitive damages.
(b) DCJ hereby irrevocably designates, appoints and empowers
CT Corporation System, presently located at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "Process Agent") as its authorized agent, to accept on
its behalf, service of any and all process which may be served in any suit,
action or proceeding of the nature referred to in paragraph (a) above in any
courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts of any thereof. Such
service may be made by mailing or delivering a copy of such process to DCJ in
care of the Process Agent at the Process Agent's above
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address and DCJ hereby irrevocably authorizes and directs the Process Agent to
accept such service on its behalf. DCJ represents and warrants that it has
granted to the Process Agent a valid, binding and enforceable irrevocable power
of attorney in the presence of a Mexican notary public, in the form of Exhibit
P-1, that such Process Agent has agreed in writing to accept such appointment
and that a true copy of such designation and acceptance has been delivered to
the Administrative Agent and the Lenders. Such designation and appointment shall
be irrevocable until all principal and interest and all other amounts payable
under the Loan Documents shall have been paid in full in accordance with the
provisions hereof. If such Process Agent shall cease so to act, DCJ covenants
and agrees to designate irrevocably and appoint without delay another such
Process Agent in New York City reasonably satisfactory to the Administrative
Agent and to deliver promptly to the Administrative Agent evidence in writing of
such other Process Agent's acceptance of such appointment. DCJ irrevocably
waives, to the fullest extent permitted by law, all claim of error by reason of
any such service and agrees that such service shall be deemed in every respect
effective service of process upon DCJ in any such suit, action or proceeding and
shall, to the fullest extent permitted by law, be taken and held to be valid and
personal service upon DCJ.
SECTION 9.15. Acknowledgments. Each of Parent and each
Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) none of the Administrative Agent, the Collateral Agent,
the Lead Arrangers, the Issuing Bank or any Lender has any fiduciary
relationship with or duty to Parent or either Borrower arising out of
or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders, on the one hand,
and Parent and the Borrowers, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among Parent, the Borrowers
and the Lenders.
SECTION 9.16. Waivers of Jury Trial. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
SECTION 9.17. Confidentiality. Each Lender (including the
Swingline Lender), the Administrative Agent, the Collateral Agent and the
Issuing Bank agrees (on behalf of itself and each of its affiliates, directors,
officers, employees, agents, advisors and representatives) to keep confidential
any Confidential Information (as defined below), and in connection therewith
comply with their customary procedures for handling confidential information of
this nature and with safe and sound banking practices, provided that nothing
herein shall limit its disclosure of any such information (a) to such of its
respective officers, directors or employees as need to know such Confidential
Information, (b) to the extent required by statute, rule, regulation or judicial
process, (c) to counsel for any of the Lenders or such Lender's auditors or
accountants, (d) to bank examiners or insurance commissioners having
jurisdiction over the disclosing Lender,
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(e) to the Administrative Agent, the Collateral Agent, the Lead Arrangers, the
Issuing Bank or any other Lender, (f) by the Administrative Agent, the
Collateral Agent, the Lead Arrangers, the Issuing Bank or any Lender to an
Affiliate thereof, (g) in connection with any enforcement of any of the Loan
Documents or (h) to any Transferee, or prospective Transferee that agrees to
comply with this Section 9.17 and (in the case of any such Person that at the
time of such disclosure has not yet become a Lender) executes and delivers to
Parent and the Borrowers a written instrument in favor of Parent and the
Borrowers confirming such agreement, in form and substance reasonably
satisfactory to Parent and the Borrowers, provided that (i) in the case of the
preceding clauses (b) and (d), such Lender shall, to the extent legally
permissible, notify the Borrowers of the proposed disclosure as far in advance
as is reasonably practicable under the circumstances, (ii) in the case of the
preceding clause (c), such Lender shall inform each such counsel, auditor or
accountant of the agreement under this Section 9.17 and take reasonable actions
to cause compliance by any such Person with this agreement (including, where
appropriate, to cause any such Person to acknowledge its agreement to be bound
by the agreement under this Section 9.17) and (iii) in the case of the preceding
clause (f), such Lender, the Collateral Agent, the Lead Arrangers, the Issuing
Bank or the Administrative Agent shall be responsible for any failure by such
Affiliate of the Lender, the Collateral Agent, the Issuing Bank, the Lead
Arrangers, or the Administrative Agent to comply with this Section 9.17. For
purposes of this Section 9.17, "Confidential Information" shall mean, with
respect to the Administrative Agent, the Collateral Agent, the Lead Arrangers,
the Issuing Bank or any Lender (each an "Affected Party"), information delivered
to such Affected Party by or on behalf of Parent, either Borrower or any
Subsidiary, the Administrative Agent or any other Lender in connection with the
transactions contemplated by or otherwise pursuant to this Agreement or
information obtained by the Affected Party in the course of any review of the
books or records of Parent, either Borrower or any Subsidiary, provided that
such term shall not include information (i) that was publicly known or otherwise
known to such Affected Party prior to the time of such disclosure on a
nonconfidential basis without a duty of confidentiality to Parent, either
Borrower or any Subsidiary being violated, (ii) that subsequently becomes
publicly known through no act or omission by any Affected Party or any Person
acting on the Affected Party's behalf, (iii) that becomes known to such Affected
Party on a nonconfidential basis without a duty of confidentiality to Parent,
either Borrower or any Subsidiary being violated and, other than through
disclosure by or on behalf of Parent or either Borrower or (iv) that constitutes
financial information delivered to any Affected Party that is otherwise publicly
available through no act or omission of any Affected Party or Person acting on
such Affected Party's behalf. Notwithstanding anything herein to the contrary,
any party to this Agreement (and any employee, representative or other agent of
such party) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure, except that tax treatment and tax structure shall not include the
identity of any existing or future party (or any affiliate of such party) to
this Agreement.
SECTION 9.18. Judgment Currency. (a) If for the purpose of
obtaining judgment in any court it is necessary to convert a sum due hereunder
in one currency into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures the Administrative
Agent could purchase the first currency with such other currency on the Business
Day preceding the day on which final judgment is given.
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(b) The obligations of Parent and the Borrowers in respect of
this Agreement, the other Loan Documents and any Note due to any party hereto
shall, notwithstanding any judgment in a currency (the "judgment currency")
other than the currency in which the sum originally due to such party is
denominated (the "original currency"), be discharged only to the extent that on
the Business Day following receipt by such party of any sum adjudged to be so
due in the judgment currency such party may in accordance with normal banking
procedures purchase the original currency with the judgment currency; if the
amount of the original currency so purchased is less than the sum originally due
to such party in the original currency, Parent or such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
party against such loss, and if the amount of the original currency so purchased
exceeds the sum originally due to any party to this Agreement, such party,
agrees to remit to Parent or such Borrower, as applicable, such excess. This
covenant shall survive the termination of this Agreement and payment of the
Loans and all other amounts payable hereunder.
SECTION 9.19. RESERVED.
SECTION 9.20. Calculations; Computations. Except as otherwise
expressly provided herein, to the extent that the determination of compliance
with any covenant contained herein or other provision hereof requires the
conversion to Dollars of foreign currency amounts, such Dollar amount shall be
the Dollar Equivalent of the amount of such foreign currency at the time such
item is to be calculated or is to be or was incurred, created or suffered or
permitted to exist or assumed or transferred or sold for purposes of this
Agreement (except if such item was incurred, created or assumed, or suffered or
permitted to exist or transferred prior to the date hereof, such conversion
shall be made based on the Dollar Equivalent of the amounts of such foreign
currency at the date hereof).
SECTION 9.21. Security Rights Granted in the Dutch Deeds of
Pledge and Covenant to Pay. Solely in connection with and for purposes of the
perfection of the security interests granted pursuant to the Dutch Deeds of
Pledge, the parties hereto agree as follows:
(i) JCI has agreed that, as security for its obligations as
Borrower under this Agreement (the "JCI Borrower Obligations"), it shall cause a
right of pledge to be vested on the shares of CDRJ Europe Holding Company B.V.
in the form of a notarial deed of pledge on twenty-four of the forty issued and
outstanding shares in the capital of CDRJ Europe Holding Company B.V. (the
"Europe Deed of Pledge"). Without prejudice to the provisions of this Agreement,
and solely for the purpose of ensuring and preserving the validity and
continuity of the security rights to be granted by JCI under or pursuant to the
Europe Deed of Pledge, JCI hereby irrevocably and unconditionally undertakes to
pay to the Collateral Agent without duplication amounts equal to and in the
currency of the JCI Borrower Obligations from time to time due in accordance
with and under the same terms and conditions as each of the JCI Borrower
Obligations (such payment undertakings and the obligations and liabilities which
are the result thereof hereinafter referred to as the "JCI Parallel Debt"). For
the avoidance of doubt, in no event shall the amount of the JCI Parallel Debt
exceed the JCI Borrower Obligations.
(ii) JCI and the Collateral Agent acknowledge that (i) for
this purpose, the JCI Parallel Debt constitutes undertakings, obligations and
liabilities of JCI to the Collateral Agent which are separate and independent
from, and without prejudice to, the JCI Borrower Obligations which JCI has to
any Secured Party and (ii) that the JCI Parallel Debt represents the Collateral
Agent's own claims (vorderingen op naam) to
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receive payment of the JCI Parallel Debt, provided that the total amount of the
JCI Parallel Debt shall never exceed the total amount of the JCI Borrower
Obligations.
(iii) Every payment of monies made by JCI to the Collateral
Agent shall (conditionally upon such payment not subsequently being avoided or
reduced by virtue of any provisions or enactments relating to bankruptcy,
insolvency, liquidation or similar laws of general application) be in
satisfaction pro tanto of the covenant by JCI contained in Section 9.21(i),
provided that, if any such payment as is mentioned above is subsequently avoided
or reduced by virtue of any provisions or enactments relating to bankruptcy,
insolvency, liquidation or similar laws of general application, the Collateral
Agent shall be entitled to receive a corresponding amount as JCI Parallel Debt
under Section 9.21 (i) above from JCI and JCI shall remain liable to satisfy
such JCI Parallel Debt and such JCI Parallel Debt shall be deemed not to have
been discharged.
(iv) Subject to the provisions of Section 9.21(i), but
notwithstanding any of the other provisions of this Section 9.21:
(a) the total amount due and payable as JCI Parallel Debt
under this Section 9.21 shall be decreased to the extent JCI shall have
paid any amounts to the Secured Parties or any of them to reduce the
outstanding JCI Borrower Obligations or any of the Secured Parties
otherwise receives any amount in payment of the JCI Borrower
Obligations; and
(b) to the extent that JCI shall have paid any amounts to the
Collateral Agent under the JCI Parallel Debt or the Collateral Agent
otherwise shall have received monies in payment of the JCI Parallel
Debt, the total amount due and payable under the JCI Borrower
Obligations shall be decreased as if said amounts were received
directly in payment of the JCI Borrower Obligations.
(v) For the avoidance of doubt, in the event that JCI is in
default in respect of the JCI Borrower Obligations, as set forth in this
Agreement, JCI shall, at the same time, be deemed in default in respect of its
obligations under the JCI Parallel Debt.
(vi) Parent has agreed that, as security for its obligations
as Guarantor under the Parent Guarantee Agreement (the "Parent Obligations"), it
shall cause a right of pledge to be vested on the shares of CDRJ Latin America
Holding Company B.V. in the form of a notarial deed of pledge on all forty
issued and outstanding shares in the capital of CDRJ Latin America Holding
Company B.V. (the "Latin America Deed of Pledge" and, together with the Europe
Deed of Pledge, the "Dutch Deeds of Pledge" ). Without prejudice to the
provisions of this Agreement and/or the Parent Guarantee Agreement, and for the
purpose of ensuring and preserving the validity and continuity of the security
rights to be granted by Parent under or pursuant to the Latin America Deed of
Pledge, Parent hereby irrevocably and unconditionally undertakes to pay to the
Collateral Agent without duplication amounts equal to and in the currency of the
Parent Obligations from time to time due in accordance with and under the same
terms and conditions as each of the Parent Obligations (such payment
undertakings and the obligations and liabilities which are the result thereof
hereinafter referred to as the "Parent Parallel Debt"). For the avoidance of
doubt, in no event shall the amount of the Parent Parallel Debt exceed the
Parent Obligations.
(vii) Parent and the Collateral Agent acknowledge that (i) for
this purpose, the Parent Parallel Debt constitutes undertakings, obligations and
liabilities of Parent to the Collateral Agent which are separate and independent
from, and without prejudice to,
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the Parent Obligations which Parent has to any Secured Party and (ii) that the
Parent Parallel Debt represents the Collateral Agent's own claims (vorderingen
op naam) to receive payment of the Parent Parallel Debt, provided that the total
amount of the Parent Parallel Debt shall never exceed the total amount of the
Parent Obligations.
(viii) Every payment of monies made by Parent to the
Collateral Agent shall (conditionally upon such payment not subsequently being
avoided or reduced by virtue of any provisions or enactments relating to
bankruptcy, insolvency, liquidation or similar laws of general application) be
in satisfaction pro tanto of the covenant by Parent contained in Section
9.21(vi), provided that, if any such payment as is mentioned above is
subsequently avoided or reduced by virtue of any provisions or enactments
relating to bankruptcy, insolvency, liquidation or similar laws of general
application, the Collateral Agent shall be entitled to receive a corresponding
amount as Parent Parallel Debt under Section 9.21(vi) above from Parent and
Parent shall remain liable to satisfy such Parent Parallel Debt and such Parent
Parallel Debt shall be deemed not to have been discharged.
(ix) Subject to the provisions of Section 9.21(vi), but
notwithstanding any of the other provisions of this Section 9.21:
(a) the total amount due and payable as Parent Parallel Debt
under this Section 9.21 shall be decreased to the extent Parent shall
have paid any amounts to the Secured Parties or any of them to reduce
the outstanding Parent Obligations or any of the Secured Parties
otherwise receives any amount in payment of the Parent Obligations; and
(b) to the extent that Parent shall have paid any amounts to
the Collateral Agent under the Parent Parallel Debt or the Collateral
Agent otherwise shall have received monies in payment of the Parent
Parallel Debt, the total amount due and payable under the Parent
Obligations shall be decreased as if said amounts were received
directly in payment of the Parent Obligations.
(x) For the avoidance of doubt, in the event that Parent is in
default in respect of the Parent Obligations, as set forth in the Credit
Agreement, Parent shall, at the same time, be deemed in default in respect of
its obligations under the Parent Parallel Debt
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
JAFRA COSMETICS
INTERNATIONAL, INC.,
By: /s/ Xxxxx X. Xxxxx, III
-------------------------------------
Name: Xxxxx X. Xxxxx, III
Title: Executive Vice President
DISTRIBUIDORA COMERCIAL JAFRA,
S.A. DE C.V.,
By: /s/ Xxxxx X. Xxxxx, III
-------------------------------------
Name: Xxxxx X. Xxxxx, III
Title: Executive Vice President
JAFRA WORLDWIDE HOLDINGS (LUX)
S.AR.L.
By: /s/ Xxxxx X. Xxxxx, III
-------------------------------------
Name: Xxxxx X. Xxxxx, III
Title: Executive Vice President
By: /s/ Xxxxxxx XxXxxxxxxx
-------------------------------------
Name: Xxxxxxx XxXxxxxxxx
Title: Senior Vice President
CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands branch,
individually and as Administrative Agent,
Collateral Agent, Swingline Lender and
Lead Arranger,
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Director
By: /s/ Xxx Xxxxx
-------------------------------------
Name: Xxx Xxxxx
Title: Director
109
XXXXXXX XXXXX
CAPITAL CORPORATION,
By: /s/ Xxxxxxx X'Xxxxx
-------------------------------
Name: Xxxxxxx X'Xxxxx
Title: Vice President